Canopy Growth Corp. and MTL Cannabis Corp. announced that they have entered into a definitive agreement under which Canopy Growth will acquire all of the issued and outstanding common shares of MTL and settle all of the debt and debt instruments owed by MTL in a transaction valued at approximately $125 million on an all-equity basis and approximately $179 million on an enterprise value (TEV) basis.
Under the terms of the agreement, each MTL shareholder will receive a fixed consideration for each MTL share equal to: (i) 0.32 of a Canopy Growth common share (each whole share, a “Canopy Growth Share”) and (ii) $0.144 in cash.
MTL was founded by Quebec entrepreneurs and brothers Richard and Michel Clément, who built the company around a deep commitment to growing high-quality cannabis flowers. The quality of cannabis products produced through MTL’s disciplined, artisan approach to growing has earned national recognition, including being named Canada’s #1 recommended brand by enthusiasts in the Brightfield 2024 study.1. MTL provides proven operational excellence, loyal customer demand and experience in producing cannabis that works for the market. Canopy Growth intends to leverage the expertise of the MTL team as it continues to expand its line of cannabis products.
“MTL offers skilled operators, strong brands and a profitable business that will strengthen our leadership in the Canadian medical market and deepen our presence in key Canadian adult markets, including Quebec,” said Canopy Growth CEO Luc Mangeau. “Their growing experience combined with our national scale allows us to improve product quality, expand supply and accelerate our path to profitable growth. Together, we are building a stronger and more competitive Canadian business for the long term.”
“MTL was built on the idea that high-quality flowers, grown with care and consistency, will always earn the trust of consumers and patients,” said MLT Cannabis Co-Founder and Chief Cultivation Officer Richard Cleman. “Joining Canopy Growth gives us a platform to bring this philosophy to more Canadians. Our respective portfolios are very complementary and we see a great opportunity to expand MTL’s reach through Canopy Growth’s national distribution and retail relationships. We are incredibly proud of what our team has built and look forward to working with Canopy Growth to continue to elevate Canadian cannabis.”
Key transaction points are available for agreement here.
1 Recognized as Canada’s #1 Budtender Recommended Brand in the Brightfield 2024 Study, Brightfield Group, Canadian Budtender Study 2024 (in partnership with O2O). Findings based on a survey of ~670 Canadian youth in several Canadian provinces.
Statistics Canada has released November retail sales for the country, with Cannabis sales are on the rise up 6.6% from October levels to C$477.9 million. This sequential increase is up 10.2% on a daily basis, driven by fewer days compared to the previous month. October, originally reported at C$451.7 million, was revised slightly lower to C$448.5 million. It was hit by a strike in British Columbia in October. Sales rose 4.6% in November from a year earlier, up from 8.3% in May, up from 7.5% in June and 6.2% in September. This was also lower than the 20.3% growth rate in August 2023 and better than the lowest growth rate in the previous year since the start of legalization, which started at -0.9% in September 2024 and then -1.6% in October due to the BC strike, and it was significantly down from the 9.1% growth in December. August’s record level was only 1.8% higher than last year’s index. Total sales are expected to grow 4.5% to C$5.39 billion in 2024 and 4.2% year-to-date in 2025.
An increase in the number of shops, as well as a fall in the prices of flowers that attract consumers from the illegal market, have boosted sales. In Ontario, the most populous province, sales fell 5.2% from October and 3% from a year ago. Alberta was down 5.5% from October and 2% from a year ago. British Columbia, which was down 55.0% sequentially in October and 54% year-over-year, was up 250% sequentially in October and 9% year-over-year, while Quebec was down 4.1% in October and 31% year-over-year.
December sales data will be released on February 20.
Based in Houston, Alan leverages his experience as an online community founder 420 Investorthe first and still the largest due diligence platform focused on publicly traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. time New Cannabis Ventureshe is responsible for content development and strategic alliances. Before turning his attention to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst with more than two decades of research and portfolio management experience. A prolific writer, with over 650 articles published since 2007 Looking for Alphawhere he has 70,000 followers, Alan is a frequent speaker at industry conferences and frequent source Media including the NY Times, Wall Street Journal, Fox Business and Bloomberg TV. Contact Alan. Twitter: |: Facebook |: LinkedIn: |: El
Canopy Growth Announces Strategic Recapitalization Transactions That Significantly Strengthen Balance Sheet to Support Growth Strategy
Refinancing in 2027 The loan and exchange is due in 2029. redeemable convertible bonds, extending the maturity dates of all outstanding debts until 2031. beginning of January while expanding the liquidity profile.
SMITHS FALLS, ON. January 8, 2026 — Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX: WEED) (Nasdaq: CGC), a leading global cannabis company dedicated to unleashing the life-enhancing power of hemp, today announced that the Company has entered into a series of transactions to recapitalize its balance sheet and extend maturity through January 13. Upon completion of these Transactions (as defined below), Canopy Growth is expected to have approximately C$425 million in cash, providing additional flexibility to support the Company’s long-term priorities.
“Today, Canopy Growth is moving forward from a strong position supported by a strong balance sheet, enhanced liquidity, extended debt maturities and clear strategic direction,” said Tom Stewart, Canopy Growth’s Chief Financial Officer. “We have created a financial runway through 2031, which allows us to take advantage of growth opportunities based on the momentum of our previously announced acquisition of MTL Cannabis Corp.”
“As we continue to execute on our strategy focused on disciplined growth, operational excellence and financial stewardship, these Transactions enable the strategic expansion needed to strengthen Canopy Growth’s leadership position, support growing demand in the European medical market, and drive our path to sustainable Adjusted EBITDA profitability,” said Chicrowef Excrowef Growth’s office.
Term loan transaction
Pursuant to the terms of the Term Loan Agreement (the “Loan Agreement”), the Company will receive US$150 million in net proceeds (the “Term Loan”) in connection with the Loan Agreement (the “Loan Transaction”) from a group of lenders led by JGB Management Inc. (the “Lenders”), with the Term Loan repayable between January 20 and G33. Term Loan to (i) repay its existing senior secured debt in a principal amount of approximately $101 million due in September 2027; (ii) for working capital and general corporate purposes; and (iii) finance any potential future acquisitions.
The Term Loan will bear an annual interest rate equal to the applicable Term SOFR Rate (minimum 3.25%) plus 6.25%, representing a reduction in the Company’s cash interest rate compared to its current existing senior secured debt.
Exchange of convertible bonds
Concurrent with the execution of the Credit Agreement, Canopy Growth also entered into an exchange agreement (the “Exchange Agreement”) with one institutional investor (the “Investor”) pursuant to which Canopy Growth will exchange approximately C$96.4 million of existing convertible notes due May 2029 (the “2029 Transaction” and, together with the Credit Transaction, the “Transactions”), which includes: (b) C$10.5 million in cash; c) 9,493,670 common shares of the Company (“Common Shares”). and (d) warrants to purchase 12,731,481 common shares of the Company (the “Investor Warrants”). The notes will bear interest at 7.50% per annum, payable semi-annually in cash, and may be converted into common stock at the option of the holder at a conversion price equal to C$1.83 per common share.
The transactions are expected to close on or about January 8, 2026 (the “Closing Date”), subject to customary closing conditions.
Additional transaction details
The aggregate principal amount of the term loan is approximately $162 million, reflecting the original issue discount. Interest on the term loan will be paid in monthly installments in cash. After the first anniversary of the first interest payment date, each Lender shall have the option to require the borrowers to pay such Lender’s pro rata share of up to $3 million of principal after each payment date of one calendar month. Prepayments and repayments of the Term Loan are subject to (i) interest equal to 12 monthly interest payments less interest payments made by the borrowers up to the date of such prepayment for prepayments or repayments made during the first year of the Term Loan, and (ii) an exit fee of approximately $5 million. Credit, only a pro rata portion of such exit fee will be payable at the time of each such partial payment. The Term Loan and the obligations under the Credit Agreement and other related credit documents will be secured by substantially all of the assets of the Company and each of its Material Subsidiaries.
The credit agreement also includes certain prepayments, a minimum of $90 million in cash or principal amount of the term loan, and various other covenants, guarantees, covenants and conditions customary for such financings.
In connection with the Credit Agreement, on the Closing Date, the Company will issue warrants to the Lenders to purchase 18,705,577 common shares of the Company (the “Loan Warrants”). Each Loan Warrant will entitle the holder to acquire one Common Share at an exercise price of $1.30 per Common Share for a period of five years from the Closing Date. Pursuant to the Exchange Transaction, each Investor Warrant will entitle the holder to acquire one Common Share at an exercise price of C$2.16 per Common Share for a period of five years from the Closing Date.
On the Closing Date, the Company will enter into registration rights agreements with the Investor and the Lenders, respectively, pursuant to which the Company will agree to file registration statements with the U.S. Securities and Exchange Commission (“SEC”) that will include the resale of the Common Shares issued to the Investor in the Exchange Transaction, as well as the Deben the Investor Common Shares and the Common Shares underlying them. Warranties, as applicable.
This news release shall not constitute an offer to sell or an offer to buy such securities, nor shall there be a sale of such securities in any state or other jurisdiction where such offer, solicitation or sale would be illegal pending registration or qualification under the securities laws of such state or other jurisdiction.
Canaccord Genuity Corp. acted as exclusive financial advisor and Cassels Brock & Blackwell LLP acted as Canadian advisor to Canopy Growth in connection with the transactions. Goodwin Procter LLP and Paul Hastings LLP acted as US counsel to Canopy Growth in connection with the Credit Transaction and the Exchange Transaction, respectively. Haynes and Boone, LLP and Stikeman Elliott LLP acted as counsel to JGB Management Inc. in connection with the Credit Transaction.
About the growth of canopies
Canopy Growth is a leading global cannabis company dedicated to bringing the power of hemp to life.
Through an unwavering commitment to consumers, Canopy Growth delivers innovative products from owned and licensed brands including Tweed, 7ACRES, DOJA, Deep Space and Claybourne, as well as category vaporizers by Storz & Bickel. In addition, Canopy Growth serves medical cannabis patients worldwide, with major operations in Canada, Europe and Australia.
Canopy Growth has also built a comprehensive ecosystem to realize the opportunities presented by the US THC market through the unconsolidated, non-controlling interests of Canopy USA, LLC (“Canopy USA”). Canopy USA’s portfolio includes ownership of Acreage Holdings, Inc., a vertically integrated multipurpose hemp operator operating in the Northeast and Midwest US, as well as the owner of Wana Wellness, LLC, The Cima Group, LLC and Mountain High Products, LLC, a leading North American edible brand majority owned by Lemurian. hemp extracts and pure vape technology.
At Canopy Growth, we’re building 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 improving the communities where we live and work, we’re paving the way for all that hemp has to offer.
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friends,
The hemp industry ended 2025 with a slight decline. The New Cannabis Ventures Global Cannabis Stock Index, which started at 100 at the end of 2012, has fallen 4.2% in 2025 to 6.59. This was the 5th consecutive annual decline.
The AdvisorShares Pure US Cannabis ETF (NYSE Arca: MSOS ) rallied last year, gaining 20.5%, but it’s down a lot since late 2020 when it was at $36.50. The 5-year yield at $4.72 was -87.1%. During that time, the Global Hemp Stock Index fell 85.2 percent, just shy of a recession.
So far in 2026, the global hemp stock index is unchanged. MSOS, which rose in December, fell 3.0% to $4.58. After last year’s big jump, investors probably aren’t too worried just yet. Perhaps they shouldn’t have, because the realignment is still in progress, and if it passes, it’s very incremental because of the elimination 280E tax. Of course, it remains to be seen whether a realignment will actually happen, and if so, when it will happen.
Investors or traders have rushed to MSOS over the past few years in hopes of a reshuffle. The lift in late December had massive volume, surpassing the volume in August when rumors of a possible realignment under Trump first surfaced. It was also heavier than when the MSOS fell after the last election in 2024. So far in 2026, volume has been fairly low, as seen in this six-month chart:
MSOS is still trading above the 12/11 price, as are most of its stocks. It’s also trading up more than 100% from near its all-time low of $2 set last year. To me, while the stock has fallen well from its recent peak, down 36.8% from its 12/18 intraday high, it looks like it could continue to decline. The recent downturn has not spurred buyers. In my 420 Investor model portfolio, I have very little exposure to MSOs compared to the Global Hemp Stock Index, just 6.6% in both MSOs compared to 25.9%.
The ETF, which is slightly leveraged, is loaded with three MSOs, as I’ve discussed before: Curaleaf (OTC: CURLF ), Green Thumb Industries (OTC: GTBIF ) and Trulieve (OTC: TCNNF ) at 67.7% MSOS. Curaleaf, which has a major debt challengeso far in 2026, it has fallen by 1.4% and moved from the second largest position to the third. Trulieve, the current largest holding, fell 5.6%, while GTI, now the second largest, rose 2.0%. MSOS has not purchased or sold shares of any of these MSOs so far in 2026.
I have watched MSOS since its day 1 which was in late 2020. Although I was and continue to be highly critical of the way it was run, I commended them for their early efforts. Unfortunately, there are no cannabis investment funds, including ETFs, that come close to MSOS in terms of assets under management. The ETF has grown its share count dramatically over the past year, despite a recent small drawdown. Investors should understand that if it hits redemptions, it could put pressure on the MSO subsector and the price of MSOS.
It is very possible that hemp will be reclassified with the end of 280E taxation. It is also possible that large MSOs will not have to pay past 280E taxes that they did not pay. If 280E goes away and the previous liabilities go away, it will be very positive for MSOs and it will likely eliminate potential MSOS repayments. Of course, if 280E holds, traders stacked in MSOS will have trouble finding new buyers. No chart will answer this question about the future of the 280E.
I continue to recommend that cannabis investors look beyond just the MSO part of the market. I have discussed several times, as well as recently, that hemp REITs make more senseand I have a lot of exposure to both of them in my modeling portfolio. There are other supporting names that should have upside if the 280E goes away for their customers, but less downside if it stays. Canadian LPs might also make sense. 280E taxation makes no sense and should go away, but it seems premature to suggest that it will.
Sincerely,
Alan:
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Based in Houston, Alan leverages his experience as an online community founder 420 Investorthe first and still the largest due diligence platform focused on publicly traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. time New Cannabis Ventureshe is responsible for content development and strategic alliances. Before turning his attention to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst with more than two decades of research and portfolio management experience. A prolific writer, with over 650 articles published since 2007 Looking for Alphawhere he has 70,000 followers, Alan is a frequent speaker at industry conferences and frequent source Media including the NY Times, Wall Street Journal, Fox Business and Bloomberg TV. Contact Alan. Twitter: |: Facebook |: LinkedIn: |: El
