Cannabis operator Canopy Growth reduces loan term by $100 million

Canadian cannabis operator Canopy Growth Corp. made an early payment to reduce a loan term by $100 million (roughly 138.5 million Canadian dollars).

The prepayment enables Canopy Growth to reduce its debt at a discounted price of $97.5 million and results in annualized interest savings of about $14 million, according to a news release.

The company said the move strengthens the company’s financial position as it executes strategic priorities.

“This early prepayment reflects our ongoing commitment to reducing cash burn and strengthening our capital structure,” Canopy Growth Chief Financial Officer Judy Hong said in a statement.

“Our proactive steps to reduce debt and extend maturity enhance our balance sheet flexibility to invest in growth areas and drive long-term value creation for our shareholders.”

The company and its senior lenders agreed to the prepayment as part of a series of amendments to its term loan, including an extension of its maturity date to Dec. 18, 2026.

Under terms of the amendment, Canopy Growth can make an additional prepayment of $100 million at a discounted price of $97.5 million by March 31, 2025.

If the second prepayment is made, the loan’s maturity date will be extended to Sept. 19, 2027.

Canopy USA, Canopy Growth’s U.S.-based holding company, announced in June that it was exercising its option to acquire American marijuana multistate operator Acreage Holdings in a deal expected to close in the first half of 2025.

Days later, Canopy said it would raise up to $250 million via an at-the-market equity program by issuing and selling new common shares in public offerings in the United States and Canada.

The company’s shares trade as CGC on the Nasdaq and WEED on the Toronto Stock Exchange.