EX-4.20





 Exhibit 4.20 

EXPLANATORY NOTE 
 This amended and
restated business acquisition report (the “Amended and Restated BAR”) amends and restates and supersedes the business acquisition report of Canopy Growth Corporation (the “Company”) dated September 18, 2018
(the “Original BAR”). 
 This Amended and Restated BAR replaces (i) the unaudited
pro-forma condensed interim consolidated statement of financial position of the Company as at June 30, 2018; (ii) the unaudited pro-forma condensed
consolidated statement of operations of the Company and pro-forma earnings per share for the year ended March 31, 2018; and (iii) the unaudited
pro-forma condensed interim consolidated statement of operations of the Company and pro-forma earnings per share for the three months ended June 30,
2018 (the “Pro Forma Financial Statements”). In the Original BAR, the Company accounted for its 67% interest in BC Tweed Joint Venture Inc. (“BC Tweed”) as a joint operation, based on the conclusion that BC Tweed
was subject to joint control. During the second quarter of fiscal 2019, the Company revised this conclusion and concluded that BC Tweed was unilaterally controlled by the Company and accordingly the Pro Forma Financial Statements have been replaced
in the Amended and Restated BAR to address the change in accounting treatment. 
 This explanatory note does not form a part of, and is not incorporated by
reference in, the Amended and Restated BAR. 












 FORM 51-102F4 

AMENDED AND RESTATED BUSINESS ACQUISITION REPORT 
  

			
	ITEM 1.	  	IDENTITY OF COMPANY
		
	1.1.	  	Name and Address of Company
		
		  	Canopy Growth Corporation (the “Company”)
		  	1 Hershey Drive
		  	Smiths Falls, Ontario K7A 0A8
		
	1.2.	  	Executive Officer
		
		  	The following executive officer of the Company is knowledgeable about the Acquisition (as defined below) and this report:
		
		  	Mr. Tim Saunders
		  	Executive Vice President & Chief Financial Officer
		  	Telephone: (613) 706-2185 ext. 150
		
	ITEM 2.	  	DETAILS OF ACQUISITION
		
	2.1.	  	Nature of Business Acquired
		
		  	All amounts in this business acquisition report are stated in Canadian dollars unless stated otherwise.
		
		  	On May 14, 2018, the Company announced that it entered into a non-binding agreement to purchase the 33% interest in BC Tweed Joint Venture Inc. (“BC Tweed”) held by 1135012 B.C. Ltd. The Company held the
remaining 67% interest in BC Tweed.
		
		  	On July 5, 2018, the Company announced that it had completed the acquisition (the “Acquisition”) of the 33% interest in BC Tweed pursuant to a share purchase agreement dated July 4, 2018, as amended as of July 5,
2018 (the “Purchase Agreement”).
		
		  	BC Tweed was incorporated by the Company on September 12, 2017. On October 10, 2017, the Company entered into a definitive joint venture agreement with 1135024 B.C. Ltd. to develop a greenhouse growing facility in Aldergrove,
British Columbia, Canada with an exclusive option to develop a further 1.7 million square feet of existing greenhouse infrastructure at a second location in Delta, British Columbia, Canada. On December 1, 2017, BC Tweed entered into an agreement to
lease the second greenhouse growing facility in Delta, British Columbia, Canada.














			
		  	The Aldergrove site includes the first and second stage licensing of 840,000 square feet of growing space, allowing vegetative growth so that the mature plants can be spread into the full 1.3 million square feet for flowering and
harvesting. The Delta site includes the initial licensing of 900,000 square feet of growing space, allowing vegetative growth so that the mature plants can be spread into the full 1.7 million square feet for flowering and harvesting.
		
	2.2.	  	Date of Acquisition
		
		  	July 5, 2018.
		
	2.3.	  	Consideration
		
		  	Pursuant to the Purchase Agreement, the Company completed the Acquisition for initial cash consideration of $1 million and 12,619,148 common shares of the Company (the “Consideration Shares”) having a value on
the closing date of approximately $440,596,103. 8,202,446 Consideration Shares are subject to the terms of an escrow agreement, all of which will be released by no later than July 5, 2021.
		
		  	The Company also acquired a call option over certain entities that hold greenhouses and related property. The Company issued 674,821 common shares of the Company in exchange for the option, having a value on the closing date of
approximately $26,790,394.
		
	2.4.	  	Effect on Financial Position
		
		  	The Company does not currently have any plans or proposals for material changes in the business acquired pursuant to the Acquisition which may have a significant impact on the financial performance and financial position of the
Company, including any proposal to sell, lease or exchange all or a substantial part of the business acquired pursuant to the Acquisition or to make any material changes to the Company’s business.
		
	2.5.	  	Prior Valuations
		
		  	No valuation opinion was required by securities legislation or a Canadian exchange or market within the last 12 months to support the consideration paid by the Company pursuant to the Acquisition.


  
 3 














					
	2.6.	  	Parties to Transaction
		
		  	The Acquisition was not with an informed person (as that term is defined in section 1.1 of National Instrument 51-102 – Continuous Disclosure Obligations), associate or affiliate of the
Company.


		
	2.7.	  	Date of Report
		
		  	December 20, 2018
		
	ITEM 3.	  	FINANCIAL STATEMENTS AND OTHER INFORMATION
		
		  	The Acquisition constitutes a “step-by-step” acquisition. Accordingly, in reliance on section 8.11 of National Instrument 51-102, the Company is exempt from providing audited financial statements
of BC Tweed, as BC Tweed has been consolidated since October 10, 2017 in the Company’s most recent annual financial statements for the year ended March 31, 2018. The following pro-forma documents of the Company are attached as
Schedule “A” to this business acquisition report:






			
		  	    (a)	  	The unaudited pro-forma condensed interim consolidated statement of financial position of the Company as at June 30, 2018;
			
		  	    (b)	  	The unaudited pro-forma condensed consolidated statement of operations of the Company and pro-forma earnings per share for the year ended March 31, 2018; and
			
		  	    (c)	  	The unaudited pro-forma condensed interim consolidated statement of operations of the Company and pro-forma earnings per share for the three months ended June 30, 2018.

 Cautionary Note Regarding Forward Looking Statements 

This business acquisition report contains “forward-looking statements” within the meaning of the United States 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, BC Tweed or the Company’s subsidiaries or affiliates to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking statements or information contained in this business acquisition report. Examples of such statements include the satisfaction of certain conditions and the release of the
Consideration Shares from escrow. 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 risks associated with changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; compliance with extensive government
regulation; diversion of management 

  
 4 













 
time on the integration of the business; and such risks contained in the Company’s annual information form dated June 27, 2018 and filed with Canadian securities regulators available on
the Company’s issuer profile on SEDAR at www.sedar.com. Although the Company believes that the assumptions and factors used in preparing the forward-looking information or forward-looking statements in this business acquisition report 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. The forward-looking information and forward-looking statements included in this
business acquisition report are made as of the date of this business acquisition report and the Company does not undertake an obligation to publicly update such forward-looking statements or forward-looking information to reflect new information,
subsequent events or otherwise unless required by applicable securities laws. 

  
 5 













 SCHEDULE A 

PRO-FORMA FINANCIAL STATEMENTS 

CANOPY GROWTH CORPORATION 
 PRO FORMA CONDENSED
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION     
 AS AT JUNE 30, 2018 

UNAUDITED 
  

																	
	 (Expressed in CDN $000’s)
	  	Canopy
Growth	 	 	Pro Forma
Adjustments	 	 	Notes	 	  	Pro Forma
Consolidated	 
	 Assets
	  				 				 				  			
	 Current assets
	  				 				 				  			
	 Cash and cash equivalents
	  	$	657,896	 	 				 				  	$	657,896	 
	 Amounts receivable
	  	 	27,746	 	 				 				  	 	27,746	 
	 Biological assets
	  	 	52,811	 	 				 				  	 	52,811	 
	 Inventory
	  	 	118,204	 	 				 				  	 	118,204	 
	 Prepaid expenses and other assets
	  	 	36,137	 	 	 	(1,000	) 	 	 	3	 	  	 	35,137	 
		  	  
	  
	 	 	  
	  
	 	 				  	  
	  
	 
		  	 	892,794	 	 	 	(1,000	) 	 				  	 	891,794	 
					
	 Property, plant and equipment
	  	 	479,898	 	 				 				  	 	479,898	 
	 Other long-term assets
	  	 	26,973	 	 				 				  	 	26,973	 
	 Investments in associates and joint ventures
	  	 	93,269	 	 				 				  	 	93,269	 
	 Other financial assets
	  	 	177,282	 	 				 				  	 	177,282	 
	 Intangible assets
	  	 	101,723	 	 				 				  	 	101,723	 
	 Goodwill
	  	 	340,374	 	 				 				  	 	340,374	 
		  	  
	  
	 	 	  
	  
	 	 				  	  
	  
	 
		  	$	2,112,313	 	 	$	(1,000	) 	 				  	$	2,111,313	 
		  	  
	  
	 	 	  
	  
	 	 				  	  
	  
	 
	 Liabilities
	  				 				 				  			
	 Current liabilities
	  				 				 				  			
	 Accounts payable and accrued liabilities
	  	$	127,248	 	 				 				  	$	127,248	 
	 Deferred revenue
	  	 	767	 	 				 				  	 	767	 
	 Current portion of long-term debt
	  	 	2,539	 	 				 				  	 	2,539	 
		  	  
	  
	 	 	  
	  
	 	 				  	  
	  
	 
		  	 	130,554	 	 	 	—  	 	 				  	 	130,554	 
					
	 Long-term debt
	  	 	617,749	 	 				 				  	 	617,749	 
	 Deferred tax liability
	  	 	30,815	 	 				 				  	 	30,815	 
	 Long-term financial liabilities
	  	 	108,732	 	 	 	(72,600	) 	 	 	3)	 	  	 	63,132	 
		  				 	 	27,000	 	 	 	3)	 	  			
		  	  
	  
	 	 	  
	  
	 	 				  	  
	  
	 
		  	 	887,850	 	 	 	(45,600	) 	 				  	 	842,250	 
		  	  
	  
	 	 	  
	  
	 	 				  	  
	  
	 
	 Shareholders’ equity
	  				 				 				  			
	 Share capital
	  	 	1,124,485	 	 	 	202,133	 	 	 	3)	 	  	 	1,326,618	 
	 Other reserves
	  	 	145,564	 	 	 	265,253	 	 	 	3)	 	  	 	(11,015	) 
		  				 	 	(422,786	) 	 	 	3)	 	  			
		  				 	 	954	 	 	 	4b)	 	  			
	 Accumulated other comprehensive income
	  	 	39,280	 	 				 				  	 	39,280	 
	 Deficit
	  	 	(171,926	) 	 	 	(954	) 	 	 	4b)	 	  	 	(172,880	) 
					
	 Equity attributable to Canopy Growth Corporation
	  	 	1,137,403	 	 	 	44,600	 	 				  	 	1,182,003	 
		  	  
	  
	 	 	  
	  
	 	 				  	  
	  
	 
	 Non-controlling interests
	  	 	87,060	 	 				 				  	 	87,060	 
		  	  
	  
	 	 	  
	  
	 	 				  	  
	  
	 
	 Total equity
	  	 	1,224,463	 	 	 	44,600	 	 				  	 	1,269,063	 
		  	  
	  
	 	 	  
	  
	 	 				  	  
	  
	 
		  	$	2,112,313	 	 	$	(1,000	) 	 				  	$	2,111,313	 
		  	  
	  
	 	 	  
	  
	 	 				  	  
	  
	 


  
 6 













 CANOPY GROWTH CORPORATION 

PRO FORMA CONDENSED INTERIM CONSOLIDATED STATEMENT OF OPERATIONS 

FOR THE THREE MONTHS ENDED JUNE 30, 2018 
 UNAUDITED

  

																	
	 (Expressed in CDN $000’s except share
amounts)
	  	Canopy
Growth	 	 	Pro Forma
Adjustments	 	  	Notes	 	 	Pro Forma
Consolidated	 
	 Revenue
	  	$	25,916	 	 				  				 	$	25,916	 
					
	 Inventory production costs expensed to cost of sales
	  	 	14,832	 	 				  				 	 	14,832	 
		  	  
	  
	 	 				  				 	  
	  
	 
	 Gross margin before the undernoted
	  	 	11,084	 	 				  				 	 	11,084	 
					
	 Fair value changes in biological assets included in inventory sold and other inventory
charges
	  	 	26,388	 	 				  				 	 	26,388	 
	 Unrealized gain on changes in fair value of biological assets
	  	 	(57,289	) 	 				  				 	 	(57,289	) 
		  	  
	  
	 	 				  				 	  
	  
	 
	 Gross margin
	  	 	41,985	 	 				  				 	 	41,985	 
		  	  
	  
	 	 				  				 	  
	  
	 
	 Sales and marketing
	  	 	17,266	 	 				  				 	 	17,266	 
	 Research and development
	  	 	756	 	 				  				 	 	756	 
	 General and administration
	  	 	19,588	 	 				  				 	 	19,588	 
	 Acquisition-related costs
	  	 	1,884	 	 				  				 	 	1,884	 
	 Share-based compensation expense
	  	 	23,072	 	 				  				 	 	23,072	 
	 Share-based compensation expense related to acquisition milestones
	  	 	7,095	 	 				  				 	 	7,095	 
	 Depreciation and amortization
	  	 	3,030	 	 				  				 	 	3,030	 
		  	  
	  
	 	 				  				 	  
	  
	 
	 Operating expenses
	  	 	72,691	 	 				  				 	 	72,691	 
		  	  
	  
	 	 				  				 	  
	  
	 
	 Loss from operations
	  	 	(30,706	) 	 				  				 	 	(30,706	) 
		  	  
	  
	 	 				  				 	  
	  
	 
	 Share of loss on equity investments
	  	 	(2,569	) 	 				  				 	 	(2,569	) 
	 Other expense, net
	  	 	(60,426	) 	 	 	16,300	 	  	 	4a	) 	 	 	(44,126	) 
		  	  
	  
	 	 	  
	  
	 	  				 	  
	  
	 
	 Total other expense, net
	  	 	(62,995	) 	 	 	16,300	 	  				 	 	(46,695	) 
		  	  
	  
	 	 	  
	  
	 	  				 	  
	  
	 
	 Loss before income taxes
	  	 	(93,701	) 	 	 	16,300	 	  				 	 	(77,401	) 
		  	  
	  
	 	 	  
	  
	 	  				 	  
	  
	 
	 Income tax (expense) recovery
	  	 	2,723	 	 				  				 	 	2,723	 
		  	  
	  
	 	 	  
	  
	 	  				 	  
	  
	 
	 Net loss
	  	$	(90,978	) 	 	$	16,300	 	  				 	$	(74,678	) 
		  	  
	  
	 	 	  
	  
	 	  				 	  
	  
	 
	 Net loss attributable to:
	  				 				  				 			
	 Canopy Growth Corporation
	  	$	(80,277	) 	 	$	16,300	 	  				 	$	(63,977	) 
	 Non-controlling interests
	  	 	(10,701	) 	 				  				 	 	(10,701	) 
		  	  
	  
	 	 	  
	  
	 	  				 	  
	  
	 
		  	$	(90,978	) 	 	$	16,300	 	  				 	$	(74,678	) 
		  	  
	  
	 	 	  
	  
	 	  				 	  
	  
	 
	 Earnings per share, basic and diluted
	  				 				  				 			
	 Net loss per share:
	  	$	(0.40	) 	 				  				 	$	(0.30	) 
	 Weighted average number of outstanding common shares:
	  	 	200,160,740	 	 	 	13,293,969	 	  				 	 	213,454,709	 


  
 7 













 CANOPY GROWTH CORPORATION 

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS 
 FOR
THE YEAR ENDED MARCH 31, 2018 
 UNAUDITED 
  

																	
	 (Expressed in CDN $000’s except share
amounts)
	  	Canopy
Growth	 	 	Pro Forma
Adjustments	 	 	Notes	 	 	Pro Forma
Consolidated	 
	 Revenue
	  	$	77,948	 	 				 				 	$	77,948	 
					
	 Inventory production costs expensed to cost of sales
	  	 	37,790	 	 				 				 	 	37,790	 
		  	  
	  
	 	 				 				 	  
	  
	 
	 Gross margin before the undernoted
	  	 	40,158	 	 				 				 	 	40,158	 
					
	 Fair value changes in biological assets included in inventory sold and other inventory
charges
	  	 	66,268	 	 				 				 	 	66,268	 
	 Unrealized gain on changes in fair value of biological assets
	  	 	(100,302	) 	 				 				 	 	(100,302	) 
		  	  
	  
	 	 				 				 	  
	  
	 
	 Gross margin
	  	 	74,192	 	 				 				 	 	74,192	 
		  	  
	  
	 	 				 				 	  
	  
	 
	 Sales and marketing
	  	 	38,203	 	 				 				 	 	38,203	 
	 Research and development
	  	 	1,453	 	 				 				 	 	1,453	 
	 General and administration
	  	 	43,819	 	 				 				 	 	43,819	 
	 Acquisition-related costs
	  	 	3,406	 	 				 				 	 	3,406	 
	 Share-based compensation expense
	  	 	29,631	 	 				 				 	 	29,631	 
	 Share-based compensation expense related to acquisition milestones
	  	 	19,475	 	 	 	954	 	 	 	4b	) 	 	 	20,429	 
	 Depreciation and amortization
	  	 	20,486	 	 				 				 	 	20,486	 
		  	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 
	 Operating expenses
	  	 	156,473	 	 	 	954	 	 				 	 	157,427	 
		  	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 
	 Loss from operations
	  	 	(82,281	) 	 	 	(954	) 	 				 	 	(83,235	) 
		  	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 
	 Share of loss on equity investments
	  	 	(1,473	) 	 				 				 	 	(1,473	) 
	 Other income (expense), net
	  	 	31,213	 	 	 	19,900	 	 	 	4b	) 	 	 	56,108	 
		  				 	 	4,995	 	 	 	4c	) 	 			
		  				 	  
	  
	 	 				 	  
	  
	 
	 Total other income, net
	  	 	29,740	 	 	 	24,895	 	 				 	 	54,635	 
		  	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 
	 Income (loss) before income taxes
	  	 	(52,541	) 	 	 	23,941	 	 				 	 	(28,600	) 
		  	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 
	 Income tax (expense) recovery
	  	 	(1,593	) 	 				 				 	 	(1,593	) 
		  	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 
	 Net income (loss)
	  	$	(54,134	) 	 	$	23,941	 	 				 	$	(30,193	) 
		  	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 
	 Net income (loss) attributable to:
	  				 				 				 			
	 Canopy Growth Corporation
	  	$	(70,353	) 	 	$	23,941	 	 				 	$	(46,412	) 
	 Non-controlling interests
	  	 	16,219	 	 				 				 	 	16,219	 
		  	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 
		  	$	(54,134	) 	 	$	23,941	 	 				 	$	(30,193	) 
		  	  
	  
	 	 	  
	  
	 	 				 	  
	  
	 
	 Earnings per share
	  				 				 				 			
	 Net income (loss) per share, basic:
	  	$	(0.40	) 	 				 				 	$	(0.24	) 
	 Weighted average number of outstanding common shares, basic:
	  	 	177,301,767	 	 	 	13,293,969	 	 				 	 	190,595,736	 


  
 8 













 Canopy Growth Corporation 

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements 

(amounts in Canadian thousands of dollars unless noted otherwise, except for per share amounts) 

1. BASIS OF PRESENTATION 
 The unaudited pro forma
condensed interim consolidated statement of financial position as at June 30, 2018, the unaudited pro forma condensed interim consolidated statement of operations for the three months ended June 30, 2018 and the unaudited pro forma
condensed consolidated statement of operations for the year ended March 31, 2018 of Canopy Growth Corporation (“Canopy”) were prepared for illustrative purposes only in compliance with National Instrument 51-102 – Continuous Disclosure Obligations. 
 The unaudited pro forma condensed consolidated statement of
financial position and the unaudited pro forma condensed consolidated statements of operations of Canopy are comprised of information derived from: 
  

	 	•	 	 the unaudited condensed interim consolidated statement of financial position of Canopy as at June 30, 2018;



  

	 	•	 	 the unaudited condensed interim consolidated statement of operations of Canopy for the three months ended
June 30, 2018; and 


  

	 	•	 	 the audited consolidated statement of operations of Canopy for the year ended March 31, 2018;



 The unaudited pro forma condensed consolidated financial statements do not include all of the disclosures required by International
Financial Reporting Standards (“IFRS”) and should be read in conjunction with Canopy’s unaudited condensed interim consolidated financial statements for the three months ended June 30, 2018 and the audited consolidated financial
statements of Canopy for the year ended March 31, 2018. 
 The unaudited pro forma consolidated financial information gives effect to the acquisition
of the minority shareholder’s (“Partner’s”) interest in BC Tweed as if it had occurred as at June 30, 2018, for the purposes of the unaudited pro forma condensed interim consolidated statement of financial position and as at
April 1, 2017 for the purposes of the unaudited pro forma consolidated statement of operations for the year ended March 31, 2018 and for the purposes of the unaudited pro forma condensed interim consolidated statement of operations for the
three months ended June 30, 2018. 
 The accounting policies used in the preparation of the unaudited pro forma condensed consolidated financial
statements are consistent with those described in the consolidated financial statements of Canopy for the year ended March 31, 2018 except for the accounting policy with respect to production and fulfillment related depreciation which was
changed as of April 1, 2018, and the adoption of IFRS 9 and 15 on April 1, 2018. These changes were described in note 3 to the condensed interim consolidated financial statement for the three months ended June 30, 2018. There was no
change to the comparative periods or transitional adjustments arising from the adoption of IFRS 9 and 15 on April 1, 2018. 
 The unaudited pro forma
condensed consolidated financial statements are not necessarily indicative of the results of operations that would have occurred had the acquisition of the Partner’s interest in BC Tweed been effected on the dates indicated, nor are the
unaudited pro forma condensed consolidated financial statements indicative of the results of operation of future periods. Actual amounts recorded upon consummation of the proposed acquisition will differ from such unaudited pro forma condensed
consolidated financial statements. Since the pro forma condensed consolidated financial statements have been developed to retroactively show the effect of a transaction that is expected to occur at a later date (even though this was accomplished by
following generally accepted practice and using reasonable assumptions), there are limitations inherent in the very nature of such pro forma data. 
 2.
DESCRIPTION OF TRANSACTION 
 On July 5, 2018 Canopy acquired the Partner’s 33% interest in BC Tweed Joint Venture Inc. (“BC Tweed”)
(the “Transaction”). 

  
 9 













 Background 

Prior to the second quarter of 2019, the Company accounted for its 67% interest in BC Tweed as a joint operation, based on the conclusion that BC Tweed was
subject to joint control. During the second quarter of 2019, the Company revised this conclusion and concluded that based on the shareholders’ agreements and the contractual terms of the offtake agreement, the significant relevant activities of
BC Tweed are unilaterally controlled by the Company. Since the Company had previously recognized the assets, liabilities, revenues and expenses of BC Tweed based on its proportionate share of BC Tweed’s output, being 100%, the conclusion that
BC Tweed should have been a consolidated subsidiary had no significant impact on the Company’s previously issued interim or annual financial statements. 

Under the terms of the original BC Tweed Shareholders’ Agreement, the Partner had the option to sell its interest in BC Tweed, in whole or in part, to
the Company. This resulted in a liability (the “BC Tweed Put Liability”) being recorded in Canopy’s financial statements at the present value of the expected redemption amount, with changes recorded in net income in the period in
which they arose. 
 As part of the original BC Tweed Shareholders’ agreement, BC Tweed had entered into a call option agreement with the Partner to
acquire all the limited partnership units of the limited partnerships which hold the greenhouses and related property that BC Tweed is currently leasing for consideration of $73,000. 

The Transaction 
 In consideration for acquiring the
Partner’s interest, the Company paid $1 million in cash and 13,293,969 shares of the Company of which 5,091,523 shares were released on closing and the remaining 8,202,446 shares were placed in escrow. The shares placed in escrow will be
released over a period of up to three years, with the exact timing of release dependent on the occurrence of specified events. 
 On closing of the
Transaction, the call option held by BC Tweed on the limited partnership units of the limited partnerships which hold the greenhouses and related property was amended to effectively increase the call option price by $27,000. This adjustment to the
purchase price represents contingent consideration, which has a fair value on the acquisition date of $27,000. 
 In conjunction with the acquisition of the
Partner’s interest the Company received an option to acquire the limited partnership units of another limited partnership currently owned by the Partner that holds greenhouse infrastructure in California. The option is exercisable for a
purchase price that is the greater of USD $92,000 and the maximum of $190,000 plus the undepreciated book value of the net assets of the partnership on the closing date. The option is exercisable 90 days after the date of US Federal legalization of
the growth, cultivation, production and sale of cannabis for medical purposes. The option expires on the earlier of 90 days after the date of US Federal legalization of the growth, cultivation, production and sale of cannabis for medical purposes
and July 5, 2023. The option is a derivative instrument that will be measured initially and subsequently at fair value. Given that the growth, cultivation, production and sale of cannabis is not currently federally legal in the US and there can
be no assurance that it will be legal, Management has estimated that this instrument has a nominal value at inception. 
 On closing of the Transaction,
Canopy amended the terms of a share-based compensation arrangement with the Partner to accelerate the vesting of 155,158 shares previously issued to the Partner, and to cancel the remaining tranches of the compensation arrangement. As a result, the
unamortized balance of the grant date fair value of the shared-based compensation of $954 was expensed immediately. 

  
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 3. PRO FORMA CONDENSED CONSOLIDATED FINANCIAL POSITION ASSUMPTIONS AND ADJUSTMENTS 

The unaudited pro forma condensed interim consolidated statement of financial position of Canopy as at June 30, 2018 has been adjusted to reflect the
following transactions as if the acquisition of the Partner’s interest in BC Tweed had been completed on June 30, 2018: 
 The Transaction has
been accounted for as the acquisition of a non-controlling shareholder’s interest. The consideration paid for the Partner’s interest was estimated to be $495,386. The consideration was comprised of:

  

	 	•	 	 $1,000 cash deposit paid prior to June 30, 2018 



 

	 	•	 	 5,091,523 shares issued on closing with a fair value of $202,133 based on a share price of $39.70



  

	 	•	 	 8,202,446 shares in escrow with a fair value of $265,253 estimated using a put option pricing model discounted to
reflect management’s best estimate of the expected dates of release 


  

	 	•	 	 $27,000 representing the fair value of the contingent consideration. 



The total consideration paid to acquire the Partner’s 33% interest has been recorded as a charge to Equity of $422,786, which represents the excess
consideration paid over the fair value of the put liability of the transaction date of $72,600. 
 4. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND
ADJUSTMENTS 
 The unaudited pro forma condensed interim consolidated statements of operations of Canopy for the three months ended June 30, 2018
and the unaudited pro forma condensed consolidated statements of operations of Canopy year ended March 31, 2018 have been adjusted to reflect the following transactions as if the acquisition of BC Tweed had been completed on April 1, 2017:

  

	 	(a)	 For the three-month period ended June 30, 2018 and for the year ended March 31, 2018, Canopy recorded
a loss in the amount of $16,300 and $19,900, respectively, related to changes in the fair value of the put liability. As a result of the pro forma effect of the Transaction, these fair value changes would not have occurred, and a pro forma
adjustment has been recorded to remove this contributed loss. 


  

	 	(b)	 As a result of the Transaction, share-based compensation expense of $954 will be incurred due to the
acceleration of the vesting of 155,158 shares and the cancellation of the remaining tranches and is recorded as a pro forma adjustment. 


  

	 	(c)	 For the year ended March 31, 2018 Canopy recorded a Partner expense of $4,995 which represented a
distribution to the Partner. As a result of the pro forma effect of the Transaction, this distribution would not have occurred and a pro forma adjustment has been recorded to remove this expense. 



 

	 	(d)	 It has been assumed that there has been no change in fair value of the option to acquire infrastructure and
therefore there is no gain or loss on this option for the year ended March 31, 2018 and the three months ended June 30, 2018 and therefore no pro forma adjustment is required. 



5. PRO FORMA NET INCOME (LOSS) PER SHARE 
 The pro forma
net income (loss) per share for the three months ended June 30, 2018 and the year ended March 31, 2018 is as follows: 

FOR THE THREE MONTHS ENDED JUNE 30, 2018 
  

					
	 Pro forma net loss attributable to CGC
	  	 	(63,977	) 
		
	 Weighted average shares outstanding
	  	 	200,160,740	 
	 Pro forma shares issued for acquisition
	  	 	13,293,969	 
		  	  
	  
	 
	 Pro forma weighted average shares outstanding
	  	 	213,454,709	 
		  	  
	  
	 
	 Pro forma net loss per share
	  	 	(0.30	) 
		  	  
	  
	 


  
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 FOR THE YEAR ENDED MARCH 31, 2018 

 

					
	 Pro forma net loss attributable to CGC
	  	 	(46,412	) 
	 Weighted average shares outstanding
	  	 	177,301,767	 
	 Pro forma shares issued for acquisition
	  	 	13,293,969	 
		  	  
	  
	 
	 Pro forma weighted average shares outstanding, basic
	  	 	190,595,736	 
		  	  
	  
	 
	 Pro forma net loss per share
	  	 	(0.24	) 
		  	  
	  
	 


  
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