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SMITHS FALLS, ON, April 1, 2024 /PRNewswire/ - Canopy Growth Corporation ("Canopy Growth" or the "Company") (TSX:WEED) (NASDAQ:CGC) is pleased to announce that Institutional Shareholder Services ("ISS"), in its report issued on Canopy Growth's special meeting of shareholders scheduled for April 12, 2024, has recommended that Canopy Growth shareholders (the "Canopy Shareholders") vote in favor of the previously announced special resolution authorizing an amendment to the Company's articles of incorporation, as amended (the "Amendment Proposal"), in order to: (i) create and authorize the issuance of an unlimited number of a new class of non-voting and non-participating exchangeable shares in the capital of Canopy Growth (the "Exchangeable Shares"); and (ii) restate the rights of the common shares in the capital of Canopy Growth (the "Common Shares") to provide for a conversion feature whereby each Common Share may at any time, at the option of the holder, be converted into one Exchangeable Share. Canopy Shareholders will be asked to consider and vote on the Amendment Proposal at a special meeting of Canopy Shareholders on Friday, April 12, 2024, at 1:00PM Eastern Time (Toronto time) (the "Meeting").
Background
On October 25, 2022, Canopy Growth announced a strategy to accelerate its entry into the U.S. cannabis industry and unleash the value of its full U.S. cannabis ecosystem through the creation of a new U.S.-domiciled holding company, Canopy USA, LLC ("Canopy USA"). Canopy USA holds all of the U.S. cannabis investments previously held by the Company, which will, subject to the Amendment Proposal being approved, enable Canopy USA to exercise rights and acquire Acreage Holdings, Inc. ("Acreage"), Mountain High Products, LLC, Wana Wellness, LLC and The Cima Group, LLC (collectively, "Wana") and Lemurian, Inc. ("Jetty"). Upon Canopy USA's acquisition of any of these U.S. THC businesses, Canopy Growth is expected to deconsolidate the financial results of Canopy USA and have a non-controlling interest in Canopy USA, which will be accounted for as an equity method (fair value) investment.
These actions are expected to enable Canopy Growth and Canopy USA to realize value in the near term prior to federal permissibility of cannabis in the United States while positioning the Company for profitable growth and a fast start upon federal permissibility of cannabis in the United States.
