During these volatile times in the market, capital can be scarce. Companies with weak balance sheets need to do everything and anything to preserve their capital and cut costs.
Canopy Growth recently announced…
about 500 job cuts and $700-800 million worth of write-downs coming next quarter. Although this was an adjustment to the current market conditions, the company still remains on track and focused on their long term objectives. Recently they announced that they would be extending a loan to one of their strategic partners and this could be the perfect timing for them.
CGC announced on Wednesday that they have entered into a loan financing arrangement With TerrAscend Canada. The loan is for C$80.5 million and will be secured to debentures. TerrAscend has issued 17,808,975 common share purchase warrants to the Company in addition to the loan.
CGC (CGC – Rated “F” – Strong Sell) originally co-invested into TerrAscend in November 2017 when the cannabis market was just heating up. About a year later in October of 2018 Canopy Growth announced the completion of a restructuring transaction with TerrAscend. These two companies have a multi-year history of working together as CGC continues to invest in all aspects of the cannabis sector. TerrAscend provides quality products, brands, and services to the global cannabinoid market. As the first North American Operator (NAO), with scale operations in both Canada and the US, the Company participates in the medical and legal adult-use market across Canada and in several US states where cannabis has been legalized for therapeutic or adult use.
David Klien CEO of CGC had some positive remarks regarding the recent news, “TerrAscend Canada has proven its ability to thrive and this loan is a strong signal that Canopy Growth is confident in their ability to execute over the long term. We are encouraged by TerrAscend’s strong performance and we view the team’s experience as an important contributor to its continued success.”
Jason Ackerman, Executive Chairman, and Interim CEO at TerrAscend was excited about the news and said that…
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