Mr. David Klein of Canopy Growth reports

CANOPY GROWTH AND INDIVA ANNOUNCE AGREEMENT TO POSITION WANA GUMMIES FOR CONTINUED NORTH AMERICAN BRAND LEADERSHIP

Canopy Growth Corp. and Indiva Ltd. and its subsidiary, Indiva Inc., have entered into a licence assignment and assumption agreement providing Canopy Growth exclusive rights and interests to manufacture, distribute and sell Wana branded products in Canada, which accelerates Canopy Growth's ability to leverage the Wana brand.

Simultaneously, to support continuity of quality supply and aligned to Canopy Growth's asset-light strategy for sourcing of cannabis 2.0 formats, Canopy Growth and Indiva also entered into a contract manufacturing agreement, under which Canopy Growth will grant Indiva the exclusive right to manufacture and supply Wana branded products in Canada for a period of five years, with the ability to renew for an additional five-year term upon mutual agreement of the parties.

David Klein, chief executive officer of Canopy Growth, said: "Collectively, these agreements provide Canopy Growth more complete ownership over the value chain for the Wana brand in Canada, while ensuring continuity of high-quality manufacturing and consistency with Canopy's asset-light production strategy. By better aligning our ownership position in Wana throughout North America, we expect to accelerate the introduction of product innovation in Canada that has already proven enormously popular in the United States. We expect this arrangement to be immediately accretive to Canopy Growth's EBITDA [earnings before interest, taxes, depreciation and amortization], and we look forward to partnering with Indiva to further bolster Wana's position as a leading edible brand in Canada."

"We are excited to form this investment and contract manufacturing partnership with Canopy Growth, and we look forward to continuing to produce Wana gummies for many years to come," said Niel Marotta, president and CEO of Indiva. "The benefits of this partnership to Indiva's shareholders are threefold: First, the strategic investment bolsters Indiva's balance sheet. Second, the initial five-year term of the contract manufacturing agreement, and the potential to renew for an additional five-year term, extends the timeline and economic benefit to Indiva from sales of Wana gummies well beyond the remaining term of the existing licensing agreement. Lastly, Indiva's commitment to production innovation has made us Canada's leading producer of high-quality cannabis edibles, and we look forward to leveraging our recent investments in automation for the processing and packaging of edible products."

"This is a great step forward in solidifying both Wana's brand leadership, as well as integrating Wana with Canopy Growth's strong presence in Canada," said Nancy Whiteman, CEO of Wana Brands. "This new agreement allows us to bring our most innovative products to Canada much more rapidly, while allowing Canopy Growth to begin recognizing the EBITDA benefits that Wana can help drive. We already know the team at Canopy Growth well, which should make for a smooth transition, and it will be great to have the oversight of the Canopy Growth team on the Wana brand in Canada. We thank Indiva for all they have done to make Wana the top edible in Canada over the past three years and we are pleased that we will have the opportunity to continue to work with their great team in a production capacity."

Transaction terms

As consideration for Indiva entering into the assignment agreement and other related agreements in respect of the transactions described herein, Indiva will complete a non-brokered private placement offering of common shares of Indiva whereby Canopy Growth will subscribe for 37.23 million common shares for an aggregate purchase price of $2,155,617 at a price per common share of 5.79 cents. The issue price was determined based on the 10-day volume-weighted average trading price of the common shares on the TSX Venture Exchange during the 10 consecutive trading days ending on the last trading day immediately prior to the date hereof. Upon closing of the private placement, Canopy will exercise control and direction over 19.99 per cent of the issued and outstanding common shares. The balance of the consideration will be paid by Canopy to Indiva as follows: (i) additional consideration representing a value of $844,383; (ii) a cash payment of $1.25-million on May 30, 2024.

Indiva intends to use the net proceeds of the private placement to satisfy its existing obligations under its licence to manufacture and sell Wana branded products in Canada and for its costs and expenses related to the manufacture and supply of Wana branded products under the manufacturing agreement.

Following the closing of the private placement, Canopy Growth will have the ability to nominate an individual as a board observer on the board of directors of Indiva. Canopy Growth and Indiva will also enter into a customary standstill and voting support agreement.

The private placement is expected to close on or before June 6, 2023, and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX-V. The common shares to be issued under the private placement will have a hold period of four months and one day from the closing date. The private placement is integral to the assignment agreement and other related agreements in respect of the transactions described herein, and therefore Indiva expects to rely on the part and parcel pricing exception available under Section 1.7 of TSX-V Policy 4.1 -- Private Placements.

Early warning

Immediately prior to the private placement, Canopy Growth and its affiliates held no common shares. Upon the closing of the private placement it is anticipated that Canopy Growth and its affiliates will exercise control and direction over 19.99 per cent of the issued and outstanding common shares. Canopy Growth and its affiliates do not currently own any convertible securities of Indiva. The common shares are being acquired for investment purposes and, as of the date of this news release, Canopy Growth and its affiliates have no current intention to acquire control or direction over additional securities of Indiva above 19.99 per cent of the issued and outstanding common shares, either alone or together with any joint actors.

About Canopy Growth Corp.

Canopy Growth is a leading North American cannabis and consumer packaged good company dedicated to unleashing the power of cannabis to improve lives. Through an unwavering commitment to its consumers, Canopy Growth delivers innovative products with a focus on premium and mainstream cannabis brands, including Doja, 7Acres, Tweed and Deep Space. Canopy's CPG portfolio features sugar-free sports hydration brand BioSteel, targeted 24-hour skin care and wellness solutions from This Works, gourmet wellness products by Martha Stewart CBD, and category-defining vaporizer technology made in Germany by Storz & Bickel. Canopy Growth has also established a comprehensive ecosystem to realize the opportunities presented by the U.S. tetrahydrocannabinol market through its rights to Acreage Holdings Inc., a vertically integrated multistate cannabis operator with principal operations in densely populated states across the northeast, as well as Wana Brands, a leading cannabis edible brand in North America, and Jetty Extracts, a California-based producer of high-quality cannabis extracts and pioneer of clean vape technology. Beyond its world-class products, Canopy Growth is leading the industry forward through a commitment to social equity, responsible use and community reinvestment -- pioneering a future where cannabis is understood and welcomed for its potential to help achieve greater well-being and life enhancement.

About Indiva Ltd.

Indiva is proud to be Canada's No. 1 producer of cannabis edibles. Indiva sets the gold standard for quality and innovation with its award-winning products, across a wide range of brands, including Wana, Bhang, Pearls by Gron, as well as Indiva branded edibles and extracts. Indiva manufactures its top-quality products in its state-of-the-art facility in London, Ont., and has a corporate work force remotely distributed across Southern Ontario.

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