Canopy Growth Strengthens Balance Sheet with Optional Early Prepayment to Reduce Term Loan by US$100 Million

Rhea-AI Summary

Canopy Growth (TSX: WEED, Nasdaq: CGC) has made an optional early prepayment of US$100 million on its senior secured term loan at a discounted price of US$97.5 million. This strategic move will result in annual interest expense savings of approximately US$13 million.

The prepayment, completed under the Term Loan Amendment agreement with senior lenders, extends the loan's maturity date to September 18, 2027. The company had the option to make this Second Prepayment by March 31, 2025.

According to CFO Judy Hong, this action strengthens Canopy's balance sheet by reducing overall debt position and lowering annual interest costs, with no material debt obligations until September 2027.

Positive

• US$13 million annual interest expense savings
• US$2.5 million discount received on debt prepayment
• Extension of debt maturity to September 2027
• Reduction in overall debt position

Negative

• Significant cash outlay of US$97.5 million for debt prepayment

Insights

Financial Analyst

Canopy Growth's US$100 million early loan prepayment represents a strategic financial maneuver that strengthens its balance sheet in several meaningful ways. Most significantly, the company secured this debt reduction at a 2.5% discount, effectively saving $2.5 million on principal while eliminating $13 million in annual interest expenses—a crucial efficiency gain for a company with a market cap of just $143 million.

The extension of the loan maturity to September 2027 dramatically improves Canopy's near-term liquidity position, creating a 30-month runway with no major debt obligations. This breathing room is particularly valuable in the volatile cannabis sector where capital access remains challenging and expensive.

The transaction reflects prudent capital management by eliminating high-cost debt, representing approximately 70% of the company's current market cap. By reducing debt service requirements in relation to revenue, Canopy is positioning itself to potentially achieve sustainable economics. The discount obtained on the prepayment also signals lender willingness to accept immediate partial payment versus waiting for full term repayment, suggesting mutually beneficial restructuring.

While this move significantly improves Canopy's financial flexibility, investors should note the company still faces the fundamental challenge of achieving sustainable growth in an industry that remains federally restricted in its largest potential market.

Early Prepayment Reduces Annual Interest Expense by US$13 Million, Extends Maturity of Term Loan to September 2027





^{This news release constitutes a “designated news release” for the purposes of Canopy Growth’s prospectus supplement dated June 6, 2024 to its short form base shelf prospectus dated February 28, 2025}

SMITHS FALLS, Ontario--(BUSINESS WIRE)-- Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX: WEED) (Nasdaq: CGC), a world-leading cannabis company dedicated to unleashing the power of cannabis to improve lives, announced today that it has made an optional early prepayment under its senior secured term loan (the “Term Loan”) in an aggregate principal amount equal to US$100 million at a discounted price of US$97.5 million. This results in interest expense savings of approximately US$13 million on an annualized basis.

“Canopy has further improved its balance sheet with this early prepayment by reducing our overall debt position as well as lowering annual interest costs,” said Judy Hong, CFO of Canopy Growth. “In addition, with this prepayment now made, we have no material debt obligation until September 2027.”

This prepayment was optional under the terms of the agreement between the Company and its senior lenders as part of a series of amendments to the Term Loan (the “Term Loan Amendment”). Pursuant to the Term Loan Amendment, Canopy Growth had the option to make this prepayment by March 31, 2025 (the “Second Prepayment”). As a result of making the Second Prepayment, the maturity date of the Term Loan has been extended to September 18, 2027.

The optional early prepayment of the Term Loan demonstrates Canopy Growth’s continued focus on reducing debt and improving its balance sheet, positioning the Company for sustainable growth in the evolving global cannabis market.

About Canopy Growth
Canopy Growth is a world-leading cannabis 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 Tweed, 7ACRES, DOJA, Deep Space and Claybourne, as well as category-defining vaporization devices by Storz & Bickel. In addition, Canopy Growth serves medical cannabis patients globally with principal operations in Canada, Germany, Poland, and Australia.

Canopy Growth has also established a comprehensive ecosystem to realize the opportunities presented by the U.S. THC market through an unconsolidated, non-controlling interest in Canopy USA. Canopy USA’s portfolio includes ownership of Acreage Holdings, a vertically integrated multi-state cannabis operator with operations throughout the U.S. Northeast and Midwest, as well as ownership of Wana Brands, a leading North American edibles brand, and majority ownership of Jetty Extracts, a California-based producer of high-quality cannabis extracts and clean vape technology.

At Canopy Growth, we’re shaping a future where cannabis is embraced for its potential to enhance well-being and improve lives. With high-quality products, a commitment to responsible use, and a focus on enhancing the communities where we live and work, we’re paving the way for a better understanding of all that cannabis can offer.

For more information visit www.canopygrowth.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250401949971/en/

Alex Thomas

Director, Communications

alex.thomas@canopygrowth.com 

Investor Contact:

Tyler Burns

Director, Investor Relations

tyler.burns@canopygrowth.com

Source: Canopy Growth Corporation

FAQ

How much will Canopy Growth (CGC) save annually from the US$100M loan prepayment?

Canopy Growth will save approximately US$13 million annually in interest expenses from the early prepayment.

What discount did Canopy Growth (CGC) receive on its US$100M loan prepayment?

Canopy Growth paid US$97.5 million for the US$100 million prepayment, receiving a US$2.5 million discount.

When is Canopy Growth's (CGC) next major debt maturity after this prepayment?

Following this prepayment, Canopy Growth has no material debt obligations until September 2027.

What is the new maturity date for Canopy Growth's (CGC) term loan?

The term loan's maturity date has been extended to September 18, 2027.