Canopy Growth Corp (TSX: WEED) (NYSE: CGC) announced this morning that it has made a further investment into that of TerrAscend Corp (CSE: TER), this time in the form of a secured debenture to the tune of C$80.5 million. The loan follows a US$10 million investment by Canopy Rivers (CSE: RIV) in late 2019, as well as a subsequent financing by TerrAscend.
Under the terms of the loan agreement, Canopy will lend to TerrAscend C$80.5 million through what is being referred to as a second debenture. The loan bears interest at a rate of 6.10%, and matures on March 10, 2030. The debenture is not convertible, is not guaranteed by TerrAscend, and is secured by the assets of TerrAscend Canada.
A total of 17,808,975 common share purchase warrants have been issued to Canopy Growth in connection with the financing. 15,656,242 of those warrants, referred to as the first tranche warrants, have an exercise price of $5.14 per share. The remainder, referred to as the second tranche warrants, have an exercise price of $3.74 per share. Both sets of warrants expire March 10, 2030.
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Proceeds from the loan will be used towards TerrAscend’s Canadian operations, its Arise Bioscience hemp division, repayment of debt, international expansion, and general corporate purposes. The funds will not and cannot be used for the firms US based cannabis operations.
TerrAscend Corp last traded at $2.73 on the CSE.
Information for this briefing was found via Sedar and TerrAscend Corp. 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.
