Canopy Growth Corporation

Item 1A. Risk Factors.

For information regarding factors that could affect our results of operations, financial condition and liquidity, see the risk factors discussed in Part I, Item 1A in the Annual Report. Except as set forth below, there have been no material changes to the risk factors previously disclosed in Part I, Item 1A in our Annual Report.

There can be no certainty that all conditions to the Floating Share Arrangement and the Acreage Amending Agreement will be satisfied or waived.

There can be no certainty, nor can the Company provide any assurance, that all conditions precedent contained in the Floating Share Arrangement Agreement and the Acreage Amending Agreement will be satisfied or waived. The Floating Share Arrangement is subject to certain conditions precedent which. There can be no certainty, nor can the Company provide any assurance, that these conditions will be satisfied or, if satisfied, when they will be satisfied. If such conditions precedent are not satisfied, it may result in the acquisition of Acreage not being completed.

Acreages financial statements express doubt about its ability to continue as a going concern.

Acreages publicly available financial statements as of and for three and six months ended March 31June 30, 2024 filed with the SEC on May 30August 14, 2024 (Acreages March 31June 30, 2024 Financial Statements) express doubt about Acreages ability to continue as a going concern. In particular, Acreages March 31June 30, 2024 Financial Statements state: [Acreage] had an accumulated deficit as of March 31June 30, 2024, as well as a net loss and negative cash flow from operating activities for the threesix months ended March 31June 30, 2024. Additionally, during the quarter [Acreage] was in default of [Acreages] Prime rate credit facilities due January 2026 . . .These factors raise substantial doubt about [Acreage]s ability to continue as a going concern for at least one year from the issuance of these financial statements. In the event that Acreage is unable to continue as a going concern, the Acreage Amended Arrangement and the Floating Share Arrangement may not be completed. In the event that the Acreage Amended Arrangement and the Floating Share Arrangement are completed and Acreage is unable to continue as a going concern, this would have a negative impact on Canopy USAs business, financial results and operations and have an adverse impact on the Companys United States strategy, and, ultimately, the Companys financial results and operations.

Subsequent to Acreages disclosure relating to the aforementioned default in Acreages Annual Financial Statements, on On June 3, 2024, the Company closed the Debt Acquisition pursuant to the credit agreement dated as of December 16, 2021, as amended by the first amendment to credit agreement dated as of on October 24, 2022, and the second amendment to credit agreement dated as of April 28, 2023 (the Prior Acreage Credit Agreement). The Company entered into various agreements in connection with the Debt Acquisition in order to, among other things, acquire the Acquired Debt in exchange for US$69.8 million in cash and the release of approximately US$30.1 million that was held in escrow pursuant to the option agreement dated November 15, 2022 among a wholly-owned subsidiary of Canopy Growth and the lenders party to the Prior Acreage Credit Agreement.

56

In view of the foregoing, Acreages continuation as a going concern is dependent upon its continued operations, which in turn is dependent upon, among other things, Acreages ability to meet its financial requirements. There is no assurance that Acreage will be successful in its plans to fund its operations and debt obligations as they become due and payable, which for greater certainty includes its debt obligations in favor of the Company in connection with the Acquired Debt. Accordingly, in the event Acreage cannot satisfy its debt obligations as they become due, the Acquired Debt may not be repaid and the Company may lose the entirety of its investment. In addition, Acreage may be required to terminate or significantly curtail its operations or enter into arrangements with third parties that may require Acreage to relinquish rights to certain aspects of its business and/or dispose of certain assets, which may

63

ultimately result in Acreage not being able to satisfy the conditions in the Acreage Amended Arrangement and the Floating Share Arrangement and the acquisition of Acreage not being completed.