Arise Bioscience, a Florida-based hemp-derived CBD subsidiary of TerrAscend Corp., has received a $20 million loan from Canada’s Canopy Growth.
In exchange for the loan, TerrAscend, which makes prescription cannabinoids and is headquartered in Mississauga, Ontario, has issued 2,105,718 common share purchase warrants to Canopy Growth, according to a statement announcing the deal Thursday.
Canopy Growth co-invested in TerrAscend in November 2017, and one year later announced the completion of a restructuring transaction with TerrAscend under which TerrAscend restructured its share capital under Ontario’s Business Corporations Act.
Canopy Growth loaned CAD $80.5 million ($63 million) to TerrAscend Canada Inc. in March of this year. The latest TerrAscend loan comes after Canopy announced it is shuttering more facilities across Canada amid a fresh round of layoffs in an effort to streamline operations and improve margins.
“With this additional loan into TerrAscend’s Arise business unit, we are confident the team will continue to execute at a high level and that they are well positioned to drive strong value creation for Canopy shareholders,” Canopy Growth CEO David Klein said in the statement.
The loan proceeds are expected to be used by Arise for general corporate purposes, debt repayment or other purposes allowed under the terms of the agreement. Arise is based in Boca Raton, Florida.
The funds are not to be used in connection with any marijuana or marijuana-related operations in the United States “unless and until such operations comply with all applicable laws of the United States,” the statement read.