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A private placement of shares and warrants announced by Canopy Growth Corp. was terminated only three days after it was unveiled, the Canadian cannabis operator disclosed in a regulatory filing with the U.S. Securities and Exchange Commission.
However, Canopy also said in the filing that it expects to be in a position to complete customary closing requirements in the next few weeks.
The Smiths Falls, Ontario-based company wouldn’t answer a query from MJBizDaily about whether the deal could be revived.
On Jan. 9, the Canadian cannabis producer announced it had entered into subscription agreements with institutional investors to sell roughly 6.9 million units in a private placement.
Gross proceeds would have been approximately $30 million (40.5 million Canadian dollars).
The private placement was supposed to close Jan. 10.
But on Jan. 12, Canopy said it terminated the subscription agreements because of issues experienced by a third party.
Canopy said it “received information from a third party that such third party could not complete certain tasks in a timely manner, which would result in delays outside of the company’s control and impact the company’s ability to satisfy customary closing requirements.”
The third party was not identified in the SEC filing.
Because the deal was terminated, “no securities will be sold pursuant to the private placement,” Canopy said in the disclosure.
When the deal was announced, Canopy had said the capital would be used to pay down debt as part of its “strategy for overall debt reduction, as well as for working capital and other general corporate purposes.”
Despite the private placement not closing, Canopy said it has sufficient liquidity through its cash on hand, debt facilities and other sources of financing.
Canopy also said it expects to report its fiscal third-quarter financial results on Feb. 9.
Shares of Canopy Growth trade as WEED on the Toronto Stock Exchange and CGC on the Nasdaq.
Matt Lamers can be reached at matt.lamers@mjbizdaily.com.
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