Canopy Growth Corporation (TSX:WEED, NYSE:CGC) announced it would be raising $50 million through a private placement with certain institutional investors.
The cannabis firm said the goal of the offering was to provide it with additional liquidity to further strengthen its financial position and it is expected to be used for working capital and other general corporate purposes.
Canopy Growth said it has entered into subscription agreements with the investors to offer 22,929,468 units at a price per unit of US$1.09 for gross proceeds of US$25 million.
It said the investors also hold an over-allotment option to acquire up to an additional 22,929,468 units at a price per unit of US$1.09 for proceeds of US$25 million at the discretion of the investors at any time before November 2, 2023.
Each unit will be comprised of one share of the company and one share purchase warrant entitling the holder to acquire a share of the company at a price equal to US$1.35 for a period of five years from the date of issuance.
Canopy said it has also agreed to provide the investor with customary registration rights.
The closing of the offering is expected to occur on or about September 19, 2023, subject to customary closing conditions.
Amid broader pullback on cannabis stocks, Canopy Growth stock had tumbled 15.5% to US$1.14 shortly after the opening bell in New York on Monday.
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