Canopy Growth Corp Files 8-K on U.S. Operations Agreement

TL;DR

Canopy Growth inked a deal for its US ops on 4/30, expect financial shifts.

AI Summary

On April 30, 2024, Canopy Growth Corporation entered into a material definitive agreement related to its U.S. cannabis operations. This agreement involves the creation of a direct financial obligation and potentially impacts its off-balance sheet arrangements. The filing also disclosed unregistered sales of equity securities and other events.

Why It Matters

This filing signals a significant development in Canopy Growth's U.S. strategy, potentially impacting its financial structure and future operations in the key American market.

Risk Assessment

Risk Level: medium — The filing involves material definitive agreements and unregistered sales of equity, which can introduce financial and operational risks.

Key Players & Entities

• Canopy Growth Corporation (company) — Registrant
• April 30, 2024 (date) — Date of earliest event reported

FAQ

Key Financial Figures

• $27.5 million — o deliver to the Company approximately C$27.5 million aggregate principal amount of Supreme D
• $50 million — tor and pay the Company approximately US$50 million in exchange for the Company issuing to
• $96,358,375 m — with an aggregate principal amount of C$96,358,375 maturing five years from the Closing Date
• $16.18 — Company at an exercise price equal to C$16.18 per Common Share for a period of five y
• $14.38 — nvestor at a conversion price equal to C$14.38 per Debenture Share, being the Canadian
• $21.57 — f the Common Shares on the TSX exceeds C$21.57 for a period of 10 consecutive trading

Filing Documents

• tm2413548d1_8-k.htm (8-K) — 50KB
• tm2413548d1_ex4-1.htm (EX-4.1) — 184KB
• tm2413548d1_ex4-2.htm (EX-4.2) — 137KB
• tm2413548d1_ex10-1.htm (EX-10.1) — 709KB
• tm2413548d1_ex10-2.htm (EX-10.2) — 962KB
• tm2413548d1_ex10-3.htm (EX-10.3) — 267KB
• tm2413548d1_ex99-1.htm (EX-99.1) — 18KB
• tm2413548d1_ex99-1img001.jpg (GRAPHIC) — 5KB
• tm2413548d1_ex10-2sp5img001.jpg (GRAPHIC) — 3KB
• 0001104659-24-057446.txt ( ) — 2956KB
• cgc-20240430.xsd (EX-101.SCH) — 3KB
• cgc-20240430_lab.xml (EX-101.LAB) — 33KB
• cgc-20240430_pre.xml (EX-101.PRE) — 22KB
• tm2413548d1_8-k_htm.xml (XML) — 3KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Second Amended and Restated Limited Liability Company Agreement As previously disclosed, on October 24, 2022, Canopy Growth Corporation (the " Company " or " Canopy Growth ") completed a number of strategic transactions (the " Reorganization ") in connection with the creation of a U.S.-domiciled holding company, Canopy USA, LLC (" Canopy USA "). Following the implementation of the Reorganization, Canopy USA, as of October 24, 2022, held certain U.S. cannabis investments previously held by the Company, including, but not limited to: (a) the options (collectively, the " Wana Options ") to acquire 100% of the membership interests of Mountain High Products, LLC, Wana Wellness, LLC and The Cima Group, LLC (collectively, " Wana "), a leading cannabis edibles brand in North America; and (b) the options (collectively, the " Jetty Options ") to acquire 100% of the shares of Lemurian, Inc. (" Jetty "), a California-based producer of high-quality cannabis extracts and pioneer of clean vape technology. In connection with the Reorganization, as previously disclosed, Canopy Growth and Canopy USA entered into a protection agreement to provide for certain covenants in order to preserve the value of the non-voting and non-participating shares in the capital of Canopy USA (the " Non-Voting Shares ") held by Canopy Growth until such time as the Non-Voting Shares are converted in accordance with their terms, but does not provide Canopy Growth with the ability to direct the business, operations or activities of Canopy USA. On April 30, 2024, Canopy USA and its members, 11065520 Canada Inc. and the Huneeus 2017 Irrevocable Trust, entered into a Second Amended and Restated Limited Liability Company Agreement (the " Second A&R LLC Agreement ") which amended and restated the prior amended and restated limited liability company agreement of Canopy USA in order to provide that the Non-Voting Shares will only be convertible into Class

03 – Creation of a Direct

Item 2.03 – Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information set forth in Item 1.01 of this Current Report under "Exchange and Subscription Agreement; Convertible Debenture and Warrants" relating to the Convertible Debenture is incorporated by reference into this Item 2.03.

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities The information set forth in Item 1.01 of this Current Report under "Exchange and Subscription Agreement; Convertible Debenture and Warrants" is incorporated by reference into this Item 3.02. The offer and sale of the Securities were made in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the " Securities Act ").

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. On May 3, 2024, Canopy Growth issued a press release (the " Press Release ") to announce the Transaction. A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information set forth and incorporated by reference in Item 7.01 of this Current Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the " Exchange Act "), or otherwise subject to the liabilities of such section. The information set forth and incorporated by reference in Item 7.01 of this Current Report, including Exhibit 99.1 attached hereto, shall not be incorporated by reference into any filing under the Securities Act or the Exchange Act, regardless of any incorporation by reference language in any such filing. 3

01 Other Events

Item 8.01 Other Events. On May 6, 2024, Canopy USA exercised (i) the Wana Options to acquire 100% of the membership interests of Wana and (ii) the Jetty Options to acquire 100% of the shares of Jetty. In addition, on April 30, 2024, Acreage Holdings, Inc. (" Acreage ") disclosed that it received a notice of default letter on April 20, 2024 from the agents of its Prime rate credit facilities due January 2026, as amended, of the occurrence of certain events of default (the " Default Letter "). Acreage disclosed that the Default Letter contained allegations that there had been three events of default with respect to the credit agreement and the agents and lenders reserved all rights, and that they were in the process of reviewing the appropriate course of action to be taken with respect to the identified events of default. Acreage further disclosed that the Default Letter did not identify that there had been any exercise of rights or remedies available to the agents or lenders under Section 9.1 of the credit agreement and that Acreage was continuing to evaluate the facts surrounding the asserted events of default and the applicable provisions of the credit agreement. In connection therewith, the agents provided notice to the Company pursuant to the Option Agreement, dated November 15, 2022 (the "Option Agreement"), among 11065520 Canada Inc. and the lenders party thereto of a breach of Acreage's minimum cash balance covenant as of March 31, 2024. The Company is continuing to evaluate the notice and the applicable provisions of the Option Agreement. As previously disclosed, on April 25, 2024, the Company, Canopy USA and Acreage agreed to extend the deadline to exercise the option to acquire the Class E subordinate voting shares of Acreage until May 9, 2024. The completion of the acquisition is subject to satisfaction or, if permitted, waiver of certain closing conditions. There can be no certainty, nor can the Company provide any assurance, that all conditions pr

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit No. Exhibit Description 4.1 Form of Convertible Debenture Certificate 4.2 Form of Warrant Certificate 10.1 Second Amended and Restated Limited Liability Company Agreement of Canopy USA, LLC, dated April 30, 2024 10.2 Exchange and Subscription Agreement, dated as of May 2, 2024, by and between the Company and the Investor 10.3 Form of Registration Rights Agreement 99.1 Press release, dated May 3, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). 4

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CANOPY GROWTH CORPORATION By: /s/ Judy Hong Judy Hong Chief Financial Officer Date: May 6, 2024 5

View Full Filing

View this 8-K filing on SEC EDGAR