Ms. Judy Hong reports

CANOPY GROWTH ANNOUNCES CLOSING OF PREVIOUSLY ANNOUNCED EXCHANGE TRANSACTION

Canopy Growth Corp. has closed its previously announced exchange transaction of certain 4.25 per cent unsecured notes due 2023 to reduce its debt obligations by approximately $263-million. Constellation Brands Inc. (CBI), through its wholly owned subsidiary Greenstar Canada Investment Limited Partnership (GCILP), participated in the transaction.

"As we navigate global economic and capital market headwinds, this action has enabled us to deleverage our balance sheet, preserve cash and reduce interest payments by addressing a substantial portion of our 4.25 per cent unsecured notes," said Judy Hong, chief financial officer at Canopy Growth. "We continue to assess all available options to further optimize our balance sheet and address the remaining 4.25 per cent unsecured notes in advance of their maturity to ensure Canopy Growth is well positioned to continue investing in the highest potential areas of our business to drive future growth."

Pursuant to the terms and conditions of the transaction, Canopy Growth acquired and cancelled approximately $263-million (approximately $203.6-million (U.S.)) aggregate principal amount of its outstanding notes from a limited number of holders, including GCILP, a subsidiary of CBI, for an aggregate purchase price (excluding accrued and unpaid interest in the amount of approximately $5.4-million (approximately $4.2-million (U.S.)), which was paid in cash) of $260-million (approximately $201.6-million (U.S.)) payable in common shares of the company.

The company satisfied the purchase price as follows: (a) on the initial closing, 35,662,420 Canopy Growth shares were issued to the noteholders, other than GCILP, based on a price equal to $3.50 (U.S.) per Canopy Growth share, which was the closing price of the Canopy Growth shares on the Nasdaq Global Select Market on June 29, 2022; and (b) on the final closing, 11,896,536 Canopy Growth shares were issued to the noteholders, other than GCILP, based on the volume-weighted average trading price of the Canopy Growth shares on the Nasdaq for the 10 consecutive trading days beginning on, and including, June 30, 2022, being $2.6245 (U.S.). In addition, on the final closing, 29,245,456 Canopy Growth shares were issued to GCILP based on a price per Canopy share equal to the averaging price.

Pursuant to the transaction, the company acquired and cancelled $100-million (approximately $77.5-million (U.S.)) aggregate principal amount of the notes held by GCILP in exchange for 29,245,456 Canopy Growth shares, representing approximately 6.7 per cent of the issued and outstanding Canopy Growth shares on a non-diluted basis immediately prior to the final closing. Upon completion of the transaction, CBI, though GCILP and CBG Holdings LLC, holds 171,499,258 Canopy Growth shares, representing approximately 35.7 per cent of the issued and outstanding Canopy Growth shares on a non-diluted basis.

GCILP's participation in the transaction is considered to be a related-party transaction within the meaning of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). Pursuant to Section 5.5(a) and 5.7(1)(a) of MI 61-101, the company is exempt from obtaining a formal valuation and minority approval of the company's shareholders with respect to the insider participation as the fair market value of the transaction is below 25 per cent of the company's market capitalization as determined in accordance with MI 61-101. In addition, the transaction was approved by the board of directors of the company with Judy A. Schmeling, a director of CBI, Garth Hankinson, chief financial officer and executive vice-president of CBI, Robert Hanson, executive vice-president and president, wine and spirits division, of CBI, and James Sabia, executive vice-president and president, beer division, of CBI, each having disclosed their interest in the transaction by virtue of their positions with CBI and abstaining from voting thereon. The company did not file a material change report 21 days prior to the closing of the transaction as the details of the insider participation in the transaction had not been finalized at that time.

The transaction was conducted as a private placement, and the Canopy Growth shares issued in the transaction were 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.

Advisers

Cassels Brock & Blackwell LLP and Latham & Watkins LLP acted as legal counsel to Canopy Growth. HudsonWest LLC and BMO Capital Markets acted as financial advisers and exchange agents to Canopy Growth.

About Canopy Growth Corp.

Canopy Growth is a world-leading diversified cannabis 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 cannabidiol products to the United States 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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