John Schroyer
Canada’s Canopy Growth Corp. (TSX: WEED) (Nasdaq: CGC) has been ordered by an arbitration tribunal to fork over C$15 million to an unnamed counterparty for breach of contract, the company disclosed this week in a regulatory filing.
In an 8-K filed with the U.S. Securities and Exchange Commission on Tuesday, Canopy notified the agency that on March 24, an arbitration tribunal ruled against it in a case that stemmed from Canopy’s cancelation of a services agreement, but didn’t divulge who or what the case involved.
“The Tribunal held that the Company did not have the right to terminate the Services Agreement,” Canopy wrote.
As a result, Canopy wrote, it’s now on the hook for C$15 million, or roughly $11 million USD, as well as 5.5% interest compounded monthly going back to December 2021, when the case began. Canopy will also have to pay the counterparty for all expenses related to the arbitration.
Canopy “continues to consider all options that may be available” following the ruling, the company wrote.
The news will only put further pressure on Canopy’s bottom line, as the company has moved in recent months to dilute shares, increase its bet on entering the U.S. cannabis market, and shutter its retail marijuana stores in Canada.
