The news comes a week after the company axed a $30 million raise.
Ontario-based Canopy Growth Corp. (TSX: WEED) (Nasdaq: CGC) entered into a private placement agreement to raise approximately $35 million, the company said Thursday.
The Smiths Falls-based company will offer 8,158,510 units at a price of $4.29 each.
According to the company, the added funds will improve the company’s liquidity, with an emphasis on reducing its debt.
“Proceeds are expected to be used to pay down debt, which is consistent with the company’s strategy for overall debt reduction, as well as for working capital and other general corporate purposes,” Canopy said in a statement.
The new fund raising effort comes after the company’s management cancelled its $30 million raise last week due to unforeseen third-party delays that impacted the deal’s closure, the company said.
It also follows mounting losses that forced Canopy to rethink its approach to growth and stand on business.
Each unit consists of one common share of Canopy Growth and an option between a Series A or Series B warrant, which provide the right to purchase additional shares at a set price of $4.83 at a future date. The Series A warrants are exercisable immediately upon the closing of the offering and are valid for five years, whereas the Series B warrants will become exercisable six months following the closure, with a similar five-year validity.
The completion of this transaction is expected around Jan. 19, contingent upon the receipt of necessary approvals, including that of the Toronto Stock Exchange, and customary closing conditions.
Canopy could not immediately be reached for comment.
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