Canopy Growth Announces Voluntary Application for a Management Cease Trade Order

Rhea-AI Summary

Canopy Growth Corporation has announced that it will need to restate its financial statements and has applied for a management cease trade order. The company is working to complete the restated financial statements and expects to file its annual report on time.

Positive

• Canopy Growth will restate its financial statements, which could provide more accurate information for investors.
• The company is working diligently to complete the restated financial statements and expects to file its annual report on time.

Negative

• The need to restate financial statements may create uncertainty for investors.

SMITHS FALLS, ON, May 26, 2023 /PRNewswire/ - Canopy Growth Corporation ("Canopy Growth" or the "Company") (TSX: WEED) (NASDAQ: CGC) announced today, that further to the Company's previously announced internal review of the financial reporting matters related to BioSteel Sports Nutrition Inc. (the "BioSteel Review") and the determination from the Company that it will need to restate its (i) audited consolidated financial statements for the fiscal year ended March 31, 2022, included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2022 and (ii) unaudited consolidated financial statements for the quarterly periods ended June 30, 2022, September 30, 2022 and December 31, 2022, included in the Corporation's Quarterly Reports on Form 10-Q for such quarterly periods (collectively, the "Restated Financial Statements"), as further described in the Company's material change report and the Company's Current Report on Form 8-K each dated May 10, 2023, pursuant to National Policy 12-203 – Management Cease Trade Orders ("NP 12-203"), the Company has voluntarily applied to the applicable securities regulatory authorities for a management cease trade order related to the Company's securities to be imposed against certain directors and officers of the Company (the "MCTO"). Once granted, the MCTO will be in effect until the Restated Financial Statements are filed. The issuance of the MCTO does not generally affect the ability of persons who have not been directors or officers of the Company to trade in their securities in accordance with applicable securities laws. Further to the Company's recent filing of Form 12b-25 with the U.S. Securities and Exchange Commission, the Company is working diligently to complete the Biosteel Review and the Restated Financial Statements and expects to file its Annual Report on Form 10-K for the fiscal year ended March 31, 2023 (the "2023 10-K") on or before the expiration of the 15 calendar day extension provided by Rule 12b-25(b) ("Rule 12b-25(b)") promulgated under the U.S. Securities Exchange Act of 1934, as amended.  

The Company intends to provide information in accordance with NP 12-203 with respect to further developments in respect of this matter promptly following their occurrence, including the issuance of bi-weekly status update reports until the Restated Financial Statements have been filed and the MCTO has been revoked. The Company has not taken any steps toward insolvency proceeding and the Company has no material information to release to the public. The Company has made the foregoing representations in accordance with the requirements of applicable securities laws.

About Canopy Growth

Canopy Growth is a leading North American cannabis and CPG company dedicated to unleashing the power of cannabis to improve lives. Through an unwavering commitment to our consumers, Canopy Growth delivers innovative products with a focus on premium and mainstream cannabis brands including Doja, 7ACRES, Tweed, and Deep Space. Our CPG portfolio features sugar-free sports hydration brand BioSteel, targeted 24-hour skincare and wellness solutions from This Works, gourmet wellness products by Martha Stewart CBD, and category defining vaporizer technology made in Germany by Storz & Bickel. Canopy Growth has also established a comprehensive ecosystem to realize the opportunities presented by the U.S. THC market through its rights to Acreage Holdings, Inc. a vertically integrated multi-state cannabis operator with principal operations in densely populated states across the Northeast, as well as Wana Brands, a leading cannabis edible brand in North America, and Jetty Extracts, a California-based producer of high-quality cannabis extracts and pioneer of clean vape technology. Beyond our world-class products, Canopy Growth is leading the industry forward through a commitment to social equity, responsible use, and community reinvestment—pioneering a future where cannabis is understood and welcomed for its potential to help achieve greater well-being and life enhancement. For more information visit www.canopygrowth.com.

FORWARD-LOOKING STATEMENTS

This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking statements and information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this news release. Examples of such statements and uncertainties include statements with respect to the potential granting of an MCTO as well as the ability of the Company to be in compliance with NP 12-203;  the the timing to complete the BioSteel Review, the outstanding work and the planned filing of the Restated Financial Statements; the Company's ability to file the 2023 10-K before the expiration of the extension of the 15 calendar day extension provided by Rule 12b-25(b); disclosure of further updates and bi-weekly status reports; and expectations for other economic, business, and/or competitive factors.

Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including delays in completing the Restated Financial Statements and the 2023 Form 10-K; negative operating cash flow; uncertainty of additional financing; use of proceeds; volatility in the price of the Company's common shares; inherent uncertainty associated with projections; expectations regarding future investment, growth and expansion of operations; regulatory and licensing risks; changes in general economic, business and political conditions, including changes in the financial and stock markets and the impacts of increased rates of inflation; legal and regulatory risks inherent in the cannabis industry, including the global regulatory landscape and enforcement related to cannabis; additional dilution; political risks and risks relating to regulatory change; risks relating to anti-money laundering laws; compliance with extensive government regulation and the interpretation of various laws regulations and policies; public opinion and perception of the cannabis industry; and such other risks contained in the public filings of the Company filed with Canadian securities regulators and available under the Company's profile on SEDAR at www.sedar.com and with the United States Securities and Exchange Commission through EDGAR at www.sec.gov/edgar, including under the heading "Risk Factors" in the Company's annual report on Form 10-K for the year ended March 31, 2022 and its subsequently filed quarterly reports on Form 10-Q.

In respect of the forward-looking statements and information, the Company has provided such statements and information in reliance on certain assumptions that they believe are reasonable at this time. Although the Company believes that the assumptions and factors used in preparing the forward-looking information or forward-looking statements in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. Should one or more of the foregoing risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The forward-looking information and forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake any obligation to publicly update such forward-looking information or forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws.

View original content to download multimedia:https://www.prnewswire.com/news-releases/canopy-growth-announces-voluntary-application-for-a-management-cease-trade-order-301835987.html

SOURCE Canopy Growth Corporation

FAQ

What is Canopy Growth Corporation announcing?

Canopy Growth Corporation is announcing that it will need to restate its financial statements and has applied for a management cease trade order.

Why does Canopy Growth need to restate its financial statements?

The company has identified financial reporting matters related to BioSteel Sports Nutrition Inc. that require restating its financial statements.

What is a management cease trade order?

A management cease trade order is imposed against certain directors and officers of a company and restricts their ability to trade securities until the restated financial statements are filed.

When will Canopy Growth file its annual report?

Canopy Growth expects to file its annual report on time, within the 15 calendar day extension provided by Rule 12b-25(b).