Canopy Growth Corp. Ordered to Pay C$15 Million in Arbitration Ruling
LOS ANGELES– Canopy Growth Corp., a major player in the cannabis industry based in Canada, has been hit with a C$15 million penalty by an arbitration tribunal for breach of contract, according to a regulatory filing made this week. The ruling came after Canopy cancelled a services agreement, which the tribunal determined the company had no right to do.
Canopy Growth Corp. filed an 8-K with the U.S. Securities and Exchange Commission on Tuesday, revealing that an arbitration tribunal had ruled against it on March 24. Although the company did not disclose any details about the case or the counterparty involved, it did state that it will have to pay C$15 million, or roughly $11 million USD, plus 5.5% interest compounded monthly since December 2021, when the case was initiated. Additionally, Canopy will be responsible for all arbitration-related expenses incurred by the counterparty.
The company expressed that it is evaluating all available options following the ruling, but the decision will undoubtedly put further financial pressure on the already struggling Canopy Growth Corp. The company has been working to dilute shares, increase its investments in the U.S. cannabis market, and close down its retail marijuana stores in Canada in recent months.
This development marks yet another setback for Canopy, which has been facing several challenges, including intense competition, regulatory hurdles, and a lack of profitability. The penalty will further dent the company’s bottom line and raises questions about its ability to overcome its struggles and stay afloat in the highly competitive cannabis market.
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