Canopy Growth Corp. is injecting an additional $30 million in its cannabis investment arm Canopy Rivers, bringing the pot producer’s ownership in the firm up 0.8 percentage points to 27.3 per cent.
The deal will see Canopy Rivers raise $85 million between Smiths Falls’ Canopy Growth and a $55-million private placement round, underwritten by CIBC Capital Markets and Eight Capital. An over-allotment option could increase the private placement by $8.3 million, resulting in gross proceeds of $93.3 million.
Canopy Rivers intends to use the additional capital to increase the firm’s stake in its current portfolio as well as to explore new options in Canada and abroad, according to the Feb. 4 press release. The firm has been expanding its portfolio already in a diverse set of sectors, including data analytics, health and wellness beverages, and hemp.
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In a Feb. 7 release, founder and co-CEO of Canopy Growth Bruce Linton said the strengthened relationship between the two firms will be beneficial for both shareholders and Canopy Growth, which is currently the largest pot producer in Canada.
The deal is expected to close on or around Feb. 27.