Canopy Growth Announces Filing of Early Warning Report regarding TerrAscend Corp.

ACQUISITION OF OPTION TO MAINTAIN PRO RATA OWNERSHIP INTEREST OF APPROXIMATELY 20% FOLLOWING TERRASCEND FINANCING

 Canopy Growth Corporation (" Canopy Growth " or the " Company ") (TSX: WEED) (NASDAQ: CGC) today announced that the Company has filed an early warning report under National Instrument 62-103 in connection with the acquisition of an option (the " Option ") to purchase 1,072,450 common shares (the " Common Shares ") of TerrAscend Corp. (" TerrAscend "), conditional upon the occurrence or waiver of amendments to federal laws of the United States to permit the general cultivation, distribution and possession of marijuana (as defined in 21 U.S.C 802) or to remove the regulation of such activities from the federal laws of the United States (the " Triggering Event "). Upon the occurrence or waiver of the Triggering Event, the Company may exercise the Option and pay the balance of the purchase price in order to acquire the Common Shares subject to the Option.

On January 13, 2021 , the Company entered into an agreement with an existing shareholder of TerrAscend to acquire the Option for aggregate consideration of approximately US$10.5 million . The acquisition of the Option resulted in an increase in the Company's interest in the Common Shares of approximately 0.7% on a partially diluted basis. In addition, since the previous early warning report filed by the Company, the Company has acquired beneficial ownership, control or direction over 22,474,130 Common Share purchase warrants (together with the acquisition of the Option, the " Acquisitions "), representing an increase in the Company's interest in the Common Shares of approximately 10.9% on a partially diluted basis.

Immediately prior to the Acquisitions, the Company beneficially owned, and exercised control or direction over, 38,890,570 exchangeable shares (the " Exchangeable Shares ") of TerrAscend, representing 100% of the issued and outstanding Exchangeable Shares on a non-diluted basis and approximately 29% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the conversion of the Exchangeable Shares into Common Shares following the occurrence or waiver of the Triggering Event.

Immediately following the Acquisitions, the Company beneficially owns, and exercises control or direction over, 38,890,570 Exchangeable Shares, an aggregate of 22,474,130 Common Share purchase warrants and is deemed to own an aggregate of 1,072,450 Common Shares that are subject to the Option, representing 100% of the issued and outstanding Exchangeable Shares on a non-diluted basis and approximately 39.9% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the conversion of the Exchangeable Shares into Common Shares and the exercise of the warrants and the Option held by the Company.

Assuming the conversion of all proportionate voting shares of TerrAscend and the Exchangeable Shares into Common Shares and the exercise of the warrants and the Option held by the Company following the occurrence or waiver of the Triggering Event, the Company would beneficially own, and exercise control or direction over approximately 26.8% of the issued and outstanding Common Shares.

While the Company currently has no immediate plans or intentions with respect to the securities of TerrAscend, depending on regulatory changes, market conditions, general economic and industry conditions, trading prices, TerrAscend's business, financial condition and prospects and/or other relevant factors, the Company 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 the Company will be available under TerrAscend's profile on SEDAR at www.sedar.com or by contacting the Company at 855 558-9333. The Company's head office is located at 1 Hershey Drive, Smith Falls, Ontario , K7A 0A8 and TerrAscend's head office is located at P.O. Box 43125, Mississauga, Ontario L5B 4A7.

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, we offer 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. Our 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 our award-winning Tweed and Tokyo Smoke banners, we reach our adult-use consumers and have 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 United States, and Europe through BioSteel sports nutrition, and This Works skin and sleep solutions; and has introduced additional federally-permissible CBD products to the United States through our First & Free and Martha Stewart CBD brands. Canopy Growth has an established partnership with Fortune 500 alcohol leader Constellation Brands. For more information visit www.canopygrowth.com.

Notice Regarding Forward Looking Statements

This press release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable U.S. and Canadian securities laws (collectively, "forward-looking statements"), which involve certain known and unknown risks and uncertainties. Forward-looking statements predict or describe our future operations, business plans, business and investment strategies and the performance of our investments. These forward-looking statements are generally identified by their use of such terms and phrases as "intend," "goal," "strategy," "estimate," "expect," "project," "projections," "forecasts," "plans," "seeks," "anticipates," "potential," "proposed," "will," "should," "could," "would," "may," "likely," "designed to," "foreseeable future," "believe," "scheduled" and other similar expressions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. Forward–looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive risks, financial results, results, performance or achievements expressed or implied by those forward–looking statements and the forward-looking statements are not guarantees of future performance. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. A discussion of some of the material factors applicable to Canopy Growth can be found under the section entitled "Risk Factors" in Canopy Growth's Annual Report on Form 10-K for the year ended March 31, 2020, filed with the Securities and Exchange Commission and with applicable Canadian securities regulators, as such factors may be further updated from time to time in its periodic filings with the Securities and Exchange Commission and with applicable Canadian securities regulators, which can be accessed at www.sec.gov/edgar and www.sedar.com , respectively. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in the filings. Any forward–looking statement included in this press release is made as of the date of this press release and, except as required by law, Canopy Growth disclaims any obligation to update or revise any forward-looking statement. Readers are cautioned not to put undue reliance on any forward-looking statement. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

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SOURCE Canopy Growth Corporation