Canopy Growth (TSX:WEED) has signed a deal valued at $297 million that will see it give up its ownership in Canopy Rivers (TSX:RIV), which it established as a venture capital firm to invest in the broader cannabis sector.
Under the agreement, Canopy Growth will receive exchangeable shares, warrants and debt in TerrAscend Corp. (CN:TER), increasing its direct conditional ownership to 21% from 13%. Canopy Growth will also increase ownership in Quebec greenhouse joint venture Vert Mirabel to 67% from 41%.
In exchange, Canopy Growth will pay Canopy Rivers, which plans to change its name, $115 million in cash and 3.75 million Canopy Growth shares. It will also give back its nearly 36.5 million class-B multiple voting shares and 15.2 million class-A subordinate voting shares in Canopy Rivers.
The deal is subject to approval by a two-thirds majority vote of holders of Canopy Rivers multiple voting and subordinate voting shares, voting separately on a class basis, as well as a simple majority of disinterested holders of subordinate voting shares.
