Ottawa-area pot producer Canopy Growth Corp. has signed a deal valued at $297 million that will see it give up its ownership in Canopy Rivers Inc., which it established as a venture capital firm to invest in the cannabis sector.
Under the agreement, Canopy Growth will receive exchangeable shares, warrants and debt in TerrAscend Corp., increasing its direct conditional ownership to 21 per cent from 13 per cent.
Canopy Growth will also increase ownership in Quebec greenhouse joint venture Vert Mirabel to 67 per cent from 41 per cent.
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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 by 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.