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Canopy Growth Corp. has signed a deal to exchange $255.4-million of its debt for shares and a little bit of cash.

Under the agreement with a limited number of noteholders, the cannabis company will acquire the 4.25 per cent unsecured convertible senior notes due in 2023 for about $252.8-million in shares plus approximately $3-million in cash for accrued and unpaid interest.

The price used to value the shares will be the volume-weighted average trading price on the Nasdaq Global Select Market for the 10 consecutive trading days beginning Thursday, subject to a floor price of US$2.50 and a maximum of US$3.50 per share.

Constellation Brands Inc., through its wholly-owned subsidiary Greenstar Canada Investment Limited Partnership, has agreed to swap half of the $200-million in notes it holds under the deal.

The company, which is already Canopy’s largest shareholder, will receive a minimum of 21.9 million Canopy shares based on the floor price and a maximum of 30.7 million shares.

Constellation currently holds nearly 142.3 million Canopy shares, representing a 35.3 per cent stake in the company.

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