Canopy Growth Locks in Debt Overhaul, Gears Up for Expansion

TORONTO – Canopy Growth Corp. detailed a pair of financial maneuvers aimed at shoring up its books and clearing a path for expansion. The deals, which include a new $150 million U.S. term loan and a swap of existing convertible notes, push back all major debt deadlines to at least January 2031 and leave the company with roughly 425 million Canadian dollars in cash reserves once finalized.

The term loan, arranged through lenders headed by JGB Management Inc., delivers net proceeds of about $150 million U.S. after fees and discounts. It replaces an earlier $101 million U.S. senior secured obligation set to mature in 2027, while carrying a lower interest rate tied to the secured overnight financing rate plus 6.25 percentage points. Separately, Canopy Growth agreed to exchange CA$96.4 million worth of 2029-dated convertible debentures held by one investor. In return, it issues CA$55 million in fresh debentures due 2031, hands over CA$10.5 million in cash, and provides nearly 9.5 million common shares plus more than 12.7 million warrants.

These steps, expected to close as soon as today pending standard approvals, mark a deliberate shift for Canopy Growth as it navigates a turbulent North American market and regulatory hurdles abroad. The influx of capital will cover debt repayments, day-to-day operations, and possible buyouts, according to company filings. Chief Financial Officer Tom Stewart called it a “position of strength,” noting the extended timeline offers “a financial runway through 2031” to build on recent moves like the purchase of MTL Cannabis Corp. CEO Luc Mongeau added that the package aligns with efforts to scale in the European medical sector and reach consistent adjusted EBITDA gains.

Wall Street took note quickly. Shares in Canopy Growth climbed 7% in early afternoon trading to around $1.35 U.S., reflecting trader optimism over the breathing room on liabilities. That pop comes against a backdrop of cautious analyst views; a consensus from five firms rates the stock a “reduce,” with targets averaging below current levels, though some see upside if execution holds. On social platforms, reactions split between cheers for the liquidity boost and reminders of the sector’s choppy history, with one trader dubbing it “trade worthy” despite past stumbles.

From a balance-sheet standpoint, the overhaul trims immediate pressures: interest expenses drop from prior secured debt levels, and the minimum cash covenant [set at the lower of $90 million U.S. or outstanding principal] adds guardrails without choking flexibility. Yet dilution looms from the new shares and warrants, potentially pressuring per-share metrics as the total count nears 342 million. For an industry long plagued by overexpansion, this feels like a measured reset, prioritizing survival over splashy bets.

As Canopy Growth presses ahead, the real test lies in converting that cash pile into market share. With U.S. legalization debates simmering and Europe opening to medical imports, the company has tools to compete, but only if it sticks to disciplined spending. For investors eyeing Cannabis turnarounds, it’s a reminder that strong finances buy time, not guarantees.