Canopy Growth (TSX: WEED) (NASDAQ: CGC) this morning announced a plan of arrangement related to its holdings in that of Canopy Rivers (TSX: RIV). The arrangement will see the company expand its ownership in both TerrAscend Corp (CSE: TER) and Vert Mirabel, while the company relinquishes all of its holdings in that of Rivers in exchange for $115 million in cash along with 3.8 million shares of the company.
Under the terms of the arrangement, Canopy is to increase its ownership in TerrAscend from 13% to roughly 21% via the acquisition of 19.4 million exchangeable shares. The company is also to acquire 2.2 million warrants with an exercise price of $5.95 per share, 0.2 million warrants with an exercise price of $6.49 per share, and a $13.2 million loan owed by TerrAscend.
The company is also to increase its ownership in Les Serres Vert Cannabis, also known as Vert Mirabel, by acquiring Canopy Rivers’ full stake in the firm. The transaction will see Canopy’s ownership stake rise from 41% to 67% as a result.
A royalty related to Tweed NB, which was recently closed, has also been cancelled. The arrangement had 24 years remaining, with the royalty cancellation to provide annual cash savings of $2.9 million for the firm.
In consideration for the above, Canopy Growth will see its 36.5 million Class B multiple voting shares and 15.2 million Class A subordinate voting shares in Canopy Rivers cancelled. Prior to cancellation, the company held a 27% ownership interest along with 84% of the voting rights of the firm. The company will also provide additional consideration in the form of $115 million in cash and the issuance of 3.75 million Canopy Growth shares.
Canopy Growth last traded at $33.28 on the TSX.
Information for this briefing was found via Sedar and Canopy Growth. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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