Canopy Growth completes C$425 million recapitalization deal

Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) announced it has entered into transactions to recapitalize its balance sheet and extend debt maturities to January 2031 at the earliest. The company expects to have approximately C$425 million in cash upon completion of the deals.

The recapitalization consists of two main components: a US$150 million term loan from lenders led by JGB Management Inc., and an exchange of approximately C$96.4 million in existing convertible debentures due May 2029 for C$80 million in new securities with a single institutional investor.

Under the term loan agreement, Canopy Growth will use the proceeds to repay existing senior secured debt of approximately US$101 million due September 2027, with remaining funds allocated for working capital and potential acquisitions. The new term loan carries an interest rate of Term SOFR plus 6.25% with a 3.25% floor, representing a decrease from the company's current debt costs.

The convertible debenture exchange includes C$55 million in new convertible debentures due July 2031 with a 7.50% interest rate, C$10.5 million in cash, 9,493,670 common shares, and 12,731,481 share purchase warrants. The new debentures are convertible at C$1.83 per share.

In connection with the term loan, Canopy Growth will issue 18,705,577 warrants to lenders exercisable at US$1.30 per share for five years. The investor warrants carry an exercise price of C$2.16 per share for the same period.

The transactions are expected to close on or around January 8, 2026, subject to customary closing conditions. The term loan includes an original issue discount, bringing the aggregate principal to approximately US$162 million, and is secured by substantially all company assets.

"We have created a financial runway through 2031, giving us the ability to seize opportunities for growth," said Tom Stewart, chief financial officer, according to the company's statement.

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