An anonymous director reports

CANOPY GROWTH ANNOUNCES ADDITIONAL EXCHANGES WITH HOLDERS OF NOTES

Canopy Growth Corp., further to its news release dated June 29, 2022, has entered into an additional privately negotiated exchange agreement with a holder of the company's outstanding 4.25 per cent unsecured senior notes due 2023, to acquire approximately $7.25-million (Canadian) (approximately $5.6-million (U.S.)) aggregate principal amount of the notes from the noteholder in exchange for common shares of the company and approximately $140,000 (Canadian) (approximately $110,000 (U.S.)) in cash for accrued and unpaid interest.

Transaction details

In accordance with the terms of the exchange agreement, Canopy Growth has agreed to acquire the notes from the noteholder for an aggregate purchase price (excluding accrued and unpaid interest, which will be paid in cash as part of the cash payment) of $7.17-million (Canadian) (approximately $5.5-million (Canadian)), which will be payable in such number of Canopy shares as is equal to the purchase price divided by the volume-weighted average trading price (VWAP) of the Canopy shares on the Nasdaq Global Select Market for the 10 consecutive trading days beginning on, and including, June 30, 2022, subject to a floor price of $2.50 (U.S.) and a maximum price equal to $3.50 (U.S.), which is the closing price of the Canopy shares on the Nasdaq on June 29, 2022.

The share consideration will be satisfied by the issuance of Canopy shares in up to two tranches as follows: (a) on the initial closing, 1,589,260 Canopy shares will be issued to the noteholder; and (b) in the event that the averaging price calculated over the averaging period is less than the market price, on or about July 18, 2022, up to such number of Canopy shares as is equal to the excess of the purchase price divided by the averaging price over the initial closing shares.

In the event that the daily VWAP of the Canopy shares on the Nasdaq during the averaging period: (a) exceeds the market price, then the daily VWAP for such trading day will instead be deemed to be the market price; or (b) is less than the floor price, then the daily VWAP for such trading day will instead be deemed to be the floor price, such that in no circumstances will more than 2,224,965 Canopy shares be issuable pursuant to the noteholder.

Together with the exchange agreements entered into prior to the announcement on June 29, 2022, a minimum of 35,662,420 Canopy shares have been or will be issued. Pursuant to the terms of the exchange agreement and the other exchange agreements, in no circumstances will more than 80,629,270 Canopy shares be issuable pursuant to the transaction.

The transactions are being conducted as private placements and any Canopy shares to be issued in the transaction will be issued pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded by Section 4(a)(2) of the Securities Act in transactions not involving any public offering.

About Canopy Growth Corp.

Canopy Growth is a world-leading diversified cannabis-based and cannabinoid-based consumer product company, driven by a passion to improve lives, end prohibition and strengthen communities by unleashing the full potential of cannabis. Leveraging consumer insights and innovation, Canopy Growth offers product varieties in high-quality dried flower, oil, softgel capsule, infused beverage, edible and topical formats, as well as vaporizer devices by Canopy Growth and industry-leader Storz & Bickel. Canopy Growth's global medical brand, Spectrum Therapeutics, sells a range of full-spectrum products using its colour-coded classification system and is a market leader in both Canada and Germany. Through Canopy Growth's award-winning Tweed and Tokyo Smoke banners, Canopy Growth reaches its adult-use consumers and has built a loyal following by focusing on top-quality products and meaningful customer relationships. Canopy Growth has entered into the health and wellness consumer space in key markets, including Canada, the United States and Europe, through BioSteel sports nutrition and This Works skin and sleep solutions; and has introduced additional hemp derived CBD (cannabidiol) products to the U.S. through its First & Free and Martha Stewart CBD brands. Canopy Growth has an established partnership with Fortune 500 alcohol leader Constellation Brands.

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