Canopy Growth retires $263 million in debt

Canopy Growth retires $263 million in debt

The cannabis company lightens its financial load as it prepares for growth

As previously announced, Canopy Growth has successfully completed the closing of the exchange transaction. This retirement of approximately $263 million of debt paves the way for strengthening the company’s balance sheet and preserving cash to support future growth.

The news came a few days ago when the cannabis industry leader revealed that it was able to close its previously announced swap transaction of certain 4.25% unsecured notes due 2023. The purpose of the transaction is to reduce the company’s debt obligations by approximately $263 million. Through its subsidiary Greenstar Canada Investment Limited, Constellation Brands was a party to the transaction.

Judy Hong, CFO of Canopy Growth, commented on the transaction, stating that the move comes at an opportune time as the company navigates global economic and capital market headwinds. Being able to complete the transaction and address a substantial portion of the unsecured notes has allowed the company to deleverage its balance sheet, reduce interest payments and preserve cash, Hong said.

“We continue to assess all available options to further optimize our balance sheet and address the remaining 4.25% unsecured notes in advance of their maturity to ensure Canopy Growth is well positioned to continue investing in the highest potential areas of our business to drive future growth,” added Hong. Under the terms and conditions of this transaction, the firm purchased and redeemed approximately $263 million aggregate principal amount of its outstanding Notes from a limited number of holders.

It should be noted that the transaction was conducted as a private placement, and the Canopy shares issued in the transaction were issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended. The company will continue to make the necessary moves as time goes on in order to maintain its development even when the winds are not blowing in the desired direction.