Canopy Growth (TSE:WEED) NYSE:CGC) said Thursday that it intends to increase its total investment in its investing arm Canopy Rivers Inc (OTCMKTS:CNPOF) by C$30 million.
The investment by the Canadian cannabis company will be made via a private placement of subordinated voting shares in the capital of Canopy Rivers in parallel with Canopy Rivers bought deal offering of subordinate voting shares.
After the closing of the deal, Canopy Growth will increase its ownership of Canopy Rivers shares to 27.3% from about 26.5%.
"The advantage of a strengthened Canopy Rivers/Canopy Growth relationship is that it accelerates and de-risks execution for invested companies," said Bruce Linton, Canopy Growth's founder and co-CEO, in a statement.
"By increasing Canopy Growth's investment in Canopy Rivers, we are demonstrating our interest in growing great companies, developing selective opportunities and delivering Canopy's shareholders more growth," added Linton.
The investment is being co-led by CIBC Capital Markets and is expected to close on or around February 27.
Canopy Growth shares held steady at $46.66 in afternoon trade on Thursday while Canopy Rivers stock slipped 1.92% to $3.57.
Contact Ellen Kelleher at [email protected]