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Canopy Growth Corporation (TSX:WEED) (Nasdaq: CGC), a global leader in cannabis production, has announced the establishment of an at-the-market equity program. This program enables Canopy Growth to issue and sell up to $250 million (or its Canadian dollar equivalent) of common shares directly from its treasury. The sales will be conducted through concurrent public offerings in the United States and Canada.
Under the ATM Program, Canopy Growth has the flexibility to sell Common Shares on the Nasdaq, TSX, or any other U.S. or Canadian trading market where its shares are listed. The volume and timing of these sales will be at the Company’s sole discretion and subject to customary conditions. The shares will be sold at market prices prevailing at the time of each sale, which means prices may fluctuate between purchasers and throughout the distribution period.
Purpose of the ATM Program
Canopy Growth intends to utilize the net proceeds from the ATM Program for a variety of purposes. These include investments in businesses, funding potential future acquisitions, and supporting working capital and general corporate purposes. Additionally, the proceeds may be used for the repayment of debt, which has been significantly reduced over the past 18 months.
Details of the Distribution Agreement
The sales under the ATM Program will be made according to the terms outlined in an equity distribution agreement dated June 6, 2024. This agreement is between Canopy Growth, BMO Nesbitt Burns Inc. as the Canadian agent, and BMO Capital Markets Corp. as the U.S. agent.
The ATM Program will remain effective until the earliest of: the sale of all Common Shares issuable under the program, the date on which the Company is notified by a securities regulatory authority that the Canadian Shelf Prospectus and/or Registration Statement is no longer effective, or July 5, 2026. The program may also be terminated earlier by the Company or the Agents in line with the terms of the Distribution Agreement.
Strategic Financial Flexibility
This ATM Program represents a strategic move for Canopy Growth, providing the Company with financial flexibility to raise capital as needed. The ability to sell shares directly into the market allows Canopy Growth to respond dynamically to market conditions and investment opportunities. By potentially raising up to $250 million, the Company can strengthen its financial position, pursue growth opportunities, and manage its debt more effectively.
