Canopy Growth Secures $5.5 Million in Loan Facilities
New financing establishes Canopy Growth as the only cannabis company with multiple financings from a commercial lending institution.
SMITHS FALLS, ON, Aug. 5, 2016 /CNW Telbec/ – Canopy Growth Corporation (TSX: CGC) (“Canopy Growth” or “the Corporation”) closed a $5.5 million financing with a commercial lending institution. The two facilities, which will be used to refinance building construction and for expenditures related to the purchase of capital equipment, is the second financing agreement that the institution has entered into with Canopy Growth. The three facilities total approximately $7 million.
These new facilities strengthen our financial position and enable Canopy Growth to continue driving forward an aggressive expansion of our operations that we believe is necessary to help meet future cannabis market demand.
Bruce Linton, Chairman & CEO, Canopy Growth
We are very pleased with this second round of financing seeing as it is the first time that the commercial lender has entered into multiple credit agreements with a Licensed Producer. We believe it signals a strong belief in the strength of Canopy Growth’s current and future potential business.
The new financing is comprised of two separate loan facilities: a term loan and a revolving line of credit. The 5 year term loan is for approximately $3.5 million and is provided on commercial terms. The revolving loan, in the amount of $2.0 million, bears a variable interest rate based on the CIBC prime rate with a 5 year term and interest only payments.
The financing is secured by a first charge mortgage on the Tweed Farms property, a first position on a Tweed Farms general security agreement and a specific security interest, backed by a corporate guaranty from Canopy Growth.
Bruce Linton commented, “Management believes it is appropriate and necessary to fund continued investment in our business in order to capitalize on Canadian and international opportunities in a timely fashion all the while considering the potential impact of key future developments in our sector, including pending changes to the Marihuana for Medical Purposes Regulations (MMPR) in response to the Allard decision which are expected to be introduced by August 24, 2016, the tabling of recommendations by the Federal Government’s Marijuana Legalization Task Force which is expected in November 2016 and the introduction of marijuana legalization legislation which is expected to happen by the spring of 2017.”
The first regulatory change on the horizon is expected this month when the Canadian government is likely to announce changes to the MMPR in response to the decision rendered on February 24, 2016 by the Federal Court in the case of Allard et al v. Canada. The Company believes that the legislative changes are likely to result in the government permitting patients to grow medical marijuana for their own use. While such changes may result in a material adverse change to the Company and sector, Canopy remains committed to an expansion of capacity that appropriately invests in the future of the cannabis sector.
About Canopy Growth Corporation
Canopy Growth is a world-leading diversified cannabis company, offering diverse brands and curated cannabis strain varieties in dried and oil extract forms. Through its wholly-owned subsidiaries, Tweed, Tweed Farms, and Bedrocan Canada, Canopy Growth operates three state-of-the-art production facilities with over half a million square feet of indoor and greenhouse production capacity. Canopy Growth has established partnerships with leading sector names in Canada and abroad. For more information, www.canopygrowth.com.
Original press release: http://www.newswire.ca/news-releases/canopy-growth-secures-55-million-in-loan-facilities-589292081.html
