Canopy Growth Announces that BioSteel Obtains Court Approval of Successful Bids in Sale and Investment Solicitation Process

Court approves combination of transactions resulting in the sale of all or substantially all of the assets of Biosteel Canada and Biosteel Manufacturing

Elimination of funding obligation to BioSteel consistent with Canopy Growth's cannabis focus and transformation to a simplified, asset-light operating model.

SMITHS FALLS, ON, Nov. 17, 2023 /PRNewswire/ - Canopy Growth Corporation ("Canopy Growth" or the "Company") (TSX: WEED) (NASDAQ: CGC) today provided an update that pursuant to the proceedings under the Companies' Creditors Arrangement Act (the "CCAA") involving BioSteel Sports Nutrition Inc. ("BioSteel Canada"), the Ontario Superior Court of Justice (Commercial List) ("CCAA Court") has approved two transactions to sell all or substantially all of the assets of BioSteel Canada and BioSteel Manufacturing, LLC ("BioSteel Manufacturing") and that pending the closing of the transactions, Canopy Growth expects to realize proceeds which will improve the Company's balance sheet.

On September 21, 2023, the CCAA Court granted an order (the "SISP Order") authorizing BioSteel Canada to conduct, under the oversight of KSV Restructuring Inc., in its capacity as court-appointed monitor of BioSteel Canada, a sale and investment solicitation process (the "SISP") in accordance with the terms and conditions relating thereto (the "SISP Procedures").

Pursuant to the SISP, two transactions were identified as the Successful Bids (as defined in the SISP):

a)    a sale of substantially all of the assets of BioSteel Canada (the "BioSteel Canada Transaction") as contemplated by an asset purchase agreement dated November 9, 2023 (the "BioSteel Canada Asset Purchase Agreement"); and

b)    a sale of all or substantially all of the assets (the "BioSteel Manufacturing Transaction" and together with the BioSteel Canada Transaction, the "Sale Transactions") of BioSteel Canada's U.S. affiliate, BioSteel Manufacturing as contemplated by an asset purchase agreement dated November 9, 2023 (the "BioSteel Manufacturing Purchase Agreement").

The CCAA Court has approved the Successful Bids and granted authority to consummate the transactions contemplated therein pursuant to the terms of approval and vestings order issued by the CCAA Court in respect of each of the Sale Transactions.

"We are pleased that this process has identified two qualified buyers for the BioSteel brand and assets. The elimination of the operating loss and cash burn as a result of ceasing to fund BioSteel has already significantly enhanced Canopy Growth's financial position, and the anticipated proceeds of the Sale Transactions are expected to improve Canopy Growth's balance sheet upon completion," said Judy Hong, Chief Financial Officer, Canopy Growth.

• Pursuant to the BioSteel Canada Asset Purchase Agreement, BioSteel Canada has agreed to sell substantially all of the assets of BioSteel Canada (other than certain inventory, accounts receivable and contracts), including: (a) all intangible assets and intellectual property; (b) all of BioSteel Canada's formulas and recipes; (c) all inventory of BioSteel Canada, other than Excluded Inventory (as defined in the BioSteel Canada Purchase Agreement); and (d) certain specified fixed assets, furniture and fixtures.
• The closing of the BioSteel Canada Transaction is subject to customary closing conditions and an order of the US Bankruptcy Court recognizing the approval of the BioSteel Canada Transaction.

• Pursuant to the BioSteel Manufacturing Purchase Agreement, BioSteel Manufacturing has agreed to sell substantially all of the assets of BioSteel Manufacturing, including: (a) the property, plant and equipment and other fixed assets listed in the exhibits to the BioSteel Manufacturing Purchase Agreement; (b) all inventories of BioSteel Manufacturing, including spare parts located at the leased facility located in Verona, Virginia (the "Property"); and (c) all production reports and records, equipment logs, operating guides and manuals relating to the foregoing assets.
• The closing of the BioSteel Manufacturing Transaction is conditional upon, among other things, (i) an assignment of the lease agreement in respect of the Property (to the extent that another resolution is not reached with the landlord), and (ii) orders of the US Bankruptcy Court recognizing, inter alia, the CCAA proceedings of BioSteel Manufacturing and the approval of the BioSteel Manufacturing Transaction by the CCAA Court.

Canopy Growth remains as BioSteel Canada's largest creditor and shareholder.   

Canopy Growth is a leading North American cannabis and consumer packaged goods ("CPG") company dedicated to unleashing the power of cannabis to improve lives. Through an unwavering commitment to our consumers, Canopy Growth delivers innovative products with a focus on premium and mainstream cannabis brands including Doja, 7ACRES, Tweed, and Deep Space. Canopy Growth's CPG portfolio features targeted 24-hour skincare 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. THC market through its rights to Acreage Holdings, Inc., a vertically integrated multi-state 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 our 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 wellbeing and life enhancement.

For more information visit www.canopygrowth.com.

References to information included on, or accessible through, our website do not constitute incorporation by reference of the information contained at or available through our website, and you should not consider such information to be part of this press release.

This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking statements and information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this news release. Examples of such statements and uncertainties include statements with respect to the closing of the Sale Transactions; the expected proceeds of the Sale Transactions; and the resulting improvements to the Company's balance sheet.

Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including BioSteel's ability to complete the Sale Transactions; risks relating to the CCAA process, including uncertainty of any residual value for BioSteel's stakeholders under the CCAA process; negative operating cash flow; uncertainty of additional financing; use of proceeds; volatility in the price of the Company's common shares; inherent uncertainty associated with projections; expectations regarding future investment, growth and expansion of operations; regulatory and licensing risks; changes in general economic, business and political conditions, including changes in the financial and stock markets and the impacts of increased rates of inflation; legal and regulatory risks inherent in the cannabis industry, including the global regulatory landscape and enforcement related to cannabis; additional dilution; political risks and risks relating to regulatory change; risks relating to anti-money laundering laws; compliance with extensive government regulation and the interpretation of various laws regulations and policies; public opinion and perception of the cannabis industry; and such other risks contained in the public filings of the Company filed with Canadian securities regulators and available under the Company's profile on SEDAR at www.sedar.com and with the Securities and Exchange Commission through EDGAR at www.sec.gov/edgar, including under the heading "Risk Factors" in the Company's annual report on Form 10-K for the year ended March 31, 2023 and its subsequently filed quarterly reports on Form 10-Q.

In respect of the forward-looking statements and information, the Company has provided such statements and information in reliance on certain assumptions that they believe are reasonable at this time. Although the Company believes that the assumptions and factors used in preparing the forward-looking information or forward-looking statements in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. Should one or more of the foregoing risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The forward-looking information and forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake any obligation to publicly update such forward-looking information or forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws.

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SOURCE Canopy Growth Corporation