Canopy Growth Corporation and Canopy USA, LLC Announce Filing of Early Warning Report regarding TerrAscend Corp.

Canopy Growth Corporation (" Canopy " or the " Company ") (TSX: WEED) (NASDAQ: CGC) and Canopy USA LLC (" Canopy USA ") today announced that each of the Company and Canopy USA has filed an early warning report under National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues in connection with the Company's direct and indirect disposition of, and Canopy USA's direct and indirect acquisition of beneficial ownership of: (i) 38,890,570 exchangeable shares (the " Exchangeable Shares ") in the capital of TerrAscend Corp. (" TerrAscend "); (ii) an option to acquire 1,072,450 common shares (the " Common Shares ") in the capital of TerrAscend for an aggregate exercise price of $1.00 (the " TerrAscend Option "); (ii) 2,152,733 Common Share purchase warrants (the " Warrants ") with an exercise price of C$3.74 per Common Share (the " TerrAscend 1A Warrants "); (iv) 15,656,242 Warrants with an exercise price of C$5.14 per Common Share (the " TerrAscend 1B Warrants "); (v) 2,225,714 Warrants with an exercise price of C$5.95 per Common Share (the " TerrAscend 2A Warrants "); (vi) 333,723 Warrants with an exercise price of C$6.49 per Common Share (the " TerrAscend 2B Warrants "); (vii) 1,926,983 Warrants with an exercise price of C$15.28 per Common Share (the " TerrAscend 3A Warrants "); and 178,735 Warrants with an exercise price of C$17.19 per Common Share (the " TerrAscend 3B Warrants ", together with the TerrAscend 1A Warrants, TerrAscend 1B Warrants, the TerrAscend 2A Warrants, TerrAscend 2B Warrants and TerrAscend 3A Warrants, the " TerrAscend Warrants ").

On October 24, 2022 , Canopy Growth, certain of its wholly-owned subsidiaries and Canopy USA completed a series of transactions to effect a reorganization (the " Reorganization "). Pursuant to the Reorganization, among other things, Canopy USA or entities controlled by Canopy USA , acquired 38,890,570 Exchangeable Shares, the TerrAscend Option to acquire 1,072,450 Common Shares and 22,474,130 TerrAscend Warrants directly and indirectly from Canopy Growth.

Completion of the Reorganization resulted in a 100% decrease in Canopy Growth's interest in the Exchangeable Shares on a non-diluted basis and an approximate 19.9% decrease in Canopy Growth's interest in the Common Shares on a partially diluted basis, assuming the conversion of the 38,890,570 Exchangeable Shares into Common Shares and the exercise of the 22,474,130 TerrAscend Warrants and the TerrAscend Option to acquire 1,072,450 Common Shares. Immediately prior to the completion of the Reorganization, Canopy Growth owned 38,890,570 Exchangeable Shares and 22,474,130 TerrAscend Warrants and was deemed to own 1,072,450 Common Shares that are subject to the TerrAscend Option, representing 100% of the issued and outstanding Exchangeable Shares on a non-diluted basis and approximately 19.9% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the conversion of the 38,890,570 Exchangeable Shares into Common Shares and the exercise of the 22,474,130 TerrAscend Warrants and the TerrAscend Option to acquire 1,072,450 Common Shares.

Immediately following the Reorganization, Canopy Growth no longer beneficially owns or controls any securities in the capital of TerrAscend. While Canopy Growth currently has no immediate plans or intentions with respect to the securities of TerrAscend, depending on market conditions, general economic and industry conditions, trading prices, TerrAscend's business, financial condition and prospects and/or other relevant factors, Canopy Growth may develop such plans or intentions in the future and, at such time, may from time to time acquire additional securities of TerrAscend.

Immediately prior to completion of the Reorganization, neither Canopy USA nor Canopy USA I Limited Partnership, Canopy USA II Limited Partnership or Canopy USA III Limited Partnership (collectively, the " Canopy USA LPs "), of which Canopy USA is the general partner, beneficially owned or exercised control or direction over any Common Shares or convertible securities of TerrAscend.

Immediately following the Reorganization, Canopy USA beneficially owns, and exercises control or direction over, 38,890,570 Exchangeable Shares and 22,474,130 TerrAscend Warrants and is deemed to own 1,072,450 Common Shares that are subject to the TerrAscend Option, representing 100% of the issued and outstanding Exchangeable Shares on a non-diluted basis and approximately 19.9% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the conversion of 38,890,570 Exchangeable Shares into Common Shares and the exercise of the 22,474,130 TerrAscend Warrants and the TerrAscend Option to acquire 1,072,450 Common Shares.

Canopy USA's beneficial ownership interest is by virtue of its control of the Canopy USA LPs. Canopy USA LP I beneficially owns, and exercises control or direction over, 2,105,718 TerrAscend Warrants, representing approximately 0.8% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the conversion of 2,105,718 TerrAscend Warrants. Canopy USA LP II beneficially owns, and exercises control or direction over, 38,890,570 Exchangeable Shares and is deemed to own 1,072,450 Common Shares that are subject to the TerrAscend Option, representing approximately 13.7% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the conversion of 38,890,570 Exchangeable Shares into Common Shares and the exercise of the TerrAscend Option. Canopy USA LP III beneficially owns, and exercises control or direction over, 20,368,412 TerrAscend Warrants, representing approximately 7.5% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the conversion of 20,368,412 TerrAscend Warrants.

Canopy USA beneficially holds the TerrAscend securities for investment purposes. While Canopy USA and/or the Canopy USA LPs currently have no immediate plans or intentions with respect to the securities of TerrAscend, depending on market conditions, general economic and industry conditions, trading prices, TerrAscend's business, financial condition and prospects and/or other relevant factors, Canopy USA and/or the Canopy USA LPs may develop such plans or intentions in the future and, at such time, may from time to time acquire additional securities, dispose of some or all of the existing or additional securities or may continue to hold the securities of TerrAscend.

A copy of the early warning report filed by Canopy Growth with respect to the securities of TerrAscend will be available under TerrAscend's profile on SEDAR at www.sedar.com or by contacting Canopy Growth at 855 558-9333.

A copy of the early warning report filed by Canopy USA will be available under TerrAscend's profile on SEDAR at www.sedar.com or by contacting Canopy USA at (415) 882-0117.

TerrAscend's head office is located at P.O. Box 43125, Mississauga, Ontario L5B 4A7. Canopy Growth's head office is located at 1 Hershey Drive, Smiths Falls, Ontario , K7A 0A8 and Canopy USA's head office is located at 35715 Hwy 40, Ste D102, Evergreen, Colorado , 80439.

About Canopy Growth

Canopy Growth (TSX:WEED, NASDAQ:CGC) 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 banner, 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 U.S., and Europe through BioSteel sports nutrition, and This Works skin and sleep solutions; and has introduced additional hemp derived CBD products to the U.S. through its First & Free and Martha Stewart CBD brands. Canopy Growth has an established partnership with Fortune 500 alcohol leader Constellation Brands.

Notice Regarding Forward-Looking Information

This news release contains "forward-looking statements" within the meaning of the U.S. 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, Canopy USA or their respective 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 regarding with respect to Canopy Growth's, Canopy USA and/or Canopy USA LP's expectations in connection with the sale or purchase of additional securities of TerrAscend in the future, on the open market or in private transactions and expectations for other economic, business, and/or competitive factors. 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 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, 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 Canopy Growth filed with Canadian securities regulators and available under the Canopy Growth's profile on SEDAR at www.sedar.com and with the U.S. Securities and Exchange Commission through EDGAR at www.sec.gov/edgar , including Canopy Growth's annual report on Form 10-K for the year ended March 31, 2022 .

In respect of the forward-looking statements and information, Canopy Growth and Canopy USA have provided such statements and information in reliance on certain assumptions that they believe are reasonable at this time. Although Canopy Growth and Canopy USA believe 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 Canopy Growth and Canopy USA have 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 neither Canopy Growth nor Canopy USA 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

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