Canadian cannabis giant Canopy Growth submits $2 billion shelf prospectus


Canopy Growth Corporation

Canopy Growth Corporation (CNW Group/Canopy Growth Corporation)

Bethan Rose Jenkins, Cannabis News Writer/Editorial

Canadian cannabis producer Canopy Growth has just filed the largest shelf prospectus ever to be recorded in the legal weed industry; not only in the Great White North but also, across the rest of the flourishing global market.

Based on the details of the recently-filed preliminary short-form base shelf prospectus, Canopy is confident that it will raise as much as USD $2 billion dollars over a 25-month period. The money will be raised in one (or more) series or issuances of securities.

Cannabis industry analysts believe that Canopy’s move indicates the Smiths Fall, Ontario-based company’s desire to restore its cash reserves.

Canopy’s fiscal year concluding on March 31, 2020, as well as the nine-month period concluding on December 31, 2020, fell into a negative cash flow. As of last year, Canopy’s valuation slipped to CAD $825 million (USD $657 million) from the CAD $4.1 billion (USD $3.3 billion) that was recorded at the end of 2018.

The new filing would pave the way for Canopy to distribute common shares, warrants, units and subscription receipts for a 25-month period “or any combination thereof in one or more series or issuances up to an aggregate total offering price of US$2,000,000,000.”

You can view the preliminary short-form base prospectus by clicking here.

Canopy Growth pot stock shares fell 18.1 percent in February

Even if they don’t invest in Canopy Growth shares, many stock traders and investors will still be aware of the company, which trades under the ticker “CGC” on the NASDAQ and “WEED” on the Toronto Stock Exchange.

This past February, the company’s NASDAQ shares sank 18.1 percent; based on data published by S&P Global Market Intelligence. Canopy’s plummeting stock value was surprising, what with the company reporting an overly positive earnings report at the beginning of February.

During its fiscal third quarter, substantial results began to emerge. For example, revenue climbed 23 percent to CA$152.3 million (USD $121 million) with adjusted EBITDA losses declining from CAD $97 million (USD $77 million) in the year ago quarter to CAD $68.4 million (USD $54 million) last quarter.

Canopy Growth launches ‘Quatreau’ CBD drinks brand in the U.S

Over the course of the next two years, Canopy anticipates that its revenue growth will accelerate between 40-50 percent. The primary catalyst for this growth will be the introduction of a new range of drinkable and edible cannabis-containing products.

Canopy, which is backed by New York-based alcohol company Constellation Brands STZ, has officially started distributing CBD-infused sparkling waters in the United States under the name “Quatreau”.

Containing 20 milligrams of hemp-derived CBD per 12 oz. serving, the ready-to-drink indulgences are available in four flavors — cucumber blended with mint, passion fruit mingled with guava, ginger meddled with lime, and blueberry mixed with acai.

It should be noted that while Canada’s flourishing recreational cannabis market offers THC versions of these branded products, the U.S. versions are non-psychoactive.

In combination with its cost-cutting plan, Canopy anticipates that the company’s cash flow will be positive by fiscal 2023. Furthermore, by fiscal 2024, it will be free cash flow positive.