Cannabis operator Canopy raises $35M million in private placement

Canadian cannabis company Canopy Growth Corp. on Thursday said it entered into subscription agreements with institutional investors to raise $35 million.

The new financing deal comes only days after the company quietly terminated a previously announced funding agreement.

Smiths Falls, Ontario-based Canopy called the new round of funding an upsizing, as the previous private placement was for $30 million (40.5 million Canadian dollars).

The new round of financing is offering 8.1 million units at the same $4.29 price per unit as the terminated deal.

The terms of the new offering are the same as the terminated round.

Each unit can be either:

• One Canopy share and a warrant to buy one share at $4.83, exercisable for five years immediately after the offering closes.
• One Canopy share and a warrant to buy one share at $4.83, exercisable for five years starting six months after closing.

Canopy said the purpose of the financing is to strengthen its financial position.

Proceeds may be used to pay down debt or for working capital, the company said.

The private placement is expected to close Jan. 19.

Canopy’s most recent private placement occurred in September.

Shares of Canopy Growth trade as WEED on the Toronto Stock Exchange and CGC on the Nasdaq.