Troubled cannabis company Canopy Growth raising $30 million

Hard-pressed Canadian cannabis company Canopy Growth Corp. is selling equity for cash, announcing a private placement of shares and warrants to raise $30 million.

The 7 million units are priced at $4.29.

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.

The capital will be used to pay down debt as part of Canopy’s “strategy for overall debt reduction, as well as for working capital and other general corporate purposes,” according to a company news release.

The private placement with unspecified institutional investors is expected to close Jan. 10.

Shares of Canopy Growth, which trade as WEED on the Toronto Stock Exchange and CGC on the Nasdaq, fell after the Tuesday morning announcement by the Smiths Falls, Ontario-based company.

Canopy’s last private placement of shares and warrants was in September.

The Canadian producer aspires to enter the U.S. marijuana market.

In the meantime, Canopy has been shedding assets:

Canopy Growth reported an annual loss of 3.3 billion Canadian dollars ($2.5 billion) for its previous full fiscal year.

The company recently consolidated its shares in order to maintain its Nasdaq listing.