Canopy Growth Corporation (TWMJF) announced that it has closed its previously announced offering on a bought deal basis. A total of 5,800,000 common shares in the capital of Canopy Growth were sold at a price of $34.60 per share, for aggregate gross proceeds of $200,680,000. The deal was underwritten by a syndicate of underwriters co-led by GMP Securities L.P. and BMO Capital Markets and including Canaccord Genuity Corp., Eight Capital, Beacon Securities Limited, and PI Financial Corp.
According to the statement, Canopy Growth intends to use the proceeds from the Offering for capital expenditures for domestic and international capacity expansion over the next 18 months as well as for general corporate requirements. In addition, Canopy Growth intends to use proceeds from the offering for general working capital purposes, such as brand augmentation, channel development, technology investments, research, and developing new product offerings. Canopy Growth may reallocate these funds as market and regulatory indicators warrant in light of the legalization and implementation of a national recreational cannabis market.
The stock was trading in the low $30’s in January, but later slipped to down to $19 and change on February 2 as cannabis stocks all seemed to correct. Today’s news has popped the stock back up by 18% to $23.00.
Canada’s recreational sales are expected to begin at some point this year. Health Minister Ginette Petitpas Taylor said on Tuesday that recreational marijuana in Canada will only go on sale a few months after it is legalized because the new retail system will need time to be tested and confirmed that it is working properly. “They told us they need eight to 12 weeks following (adoption of the law) for preparatory activities to occur, such as preparatory movement of product from licensed producers to distribution and retail outlets,” Petitpas Taylor told the Senate upper chamber.
Canopy Growth offers distinct cannabis brands and curated cannabis varieties in dried, oil and Softgel capsule forms. It has established partnerships with leading sector names including cannabis icons Snoop Dogg and Organa Brands, breeding legends DNA Genetics and Green House seeds, and Fortune 500 alcohol leader Constellation Brands.
Canopy Growth operates seven cannabis production sites with over 665,000 square feet of production capacity, including over 500,000 square feet of GMP-certified production space. The company has operations in seven countries across four continents.