Canopy Growth’s eligible employees participate in a share-based compensation plan as noted below.

On September 21, 2020, the Company’s shareholders approved amendments to the Company’s Amended and Restated Omnibus Incentive Plan (as amended and restated, the “Omnibus Plan”) pursuant to which the Company can issue share-based long-term incentives. The Omnibus Plan approved by the shareholders extended the maximum term of each Option (as defined below) to be granted by the Company to ten years from the date of grant rather than six years from the date of grant. On May 27, 2021, the Board of Directors of the Company approved certain amendments to the Omnibus Plan in order to reduce the maximum number of shares available for issuance under the Omnibus Plan from 15% of the issued and outstanding shares to 10% of the issued and outstanding shares from time to time less the number of shares issuable pursuant to other security-based compensation arrangements of the Company. All directors, officers, employees and independent contractors of the Company are eligible to receive awards of common

share purchase options (“Options”), RSUs, performance share units (“PSUs”), deferred share units, stock appreciation rights, performance awards, or other shares-based awards (collectively, the “Awards”) under the Omnibus Plan.

The maximum number of common shares reserved for Awards is 51,730,555 at March 31, 2023 (March 31, 2022 – 39,442,260). As of March 31, 2023, the only Awards issued have been options, RSUs, and PSUs under the Omnibus Plan.

The Omnibus Plan is administered by the Corporate Governance, Compensation and Nominating Committee of the Board (the “CGC&N Committee”) which establishes exercise prices, at not less than the market price at the date of grant, and expiry dates. Awards under the Omnibus Plan generally vest in increments with 1/3 vesting on each of the first, second and third anniversaries from the date of grant, with expiry dates set at ten years from issuance, subject to the discretion of the CGC&N Committee pursuant to the Omnibus Plan to provide for an alternative expiry date or vesting period in an award agreement for the grant of Awards, subject to limits contained in the Omnibus Plan.

Under the Company’s Employee Share Purchase Plan (the “Purchase Plan”) the aggregate number of common shares that may be issued is 600,000, and the maximum number of common shares which may be issued in any one fiscal year shall not exceed 300,000. As of March 31, 2023, the Company has issued a total of 535,666 common shares under the Purchase Plan (March 31, 2022 – 235,813) with 299,853 being issued in the current fiscal year (March 31, 2022 – 198,501).

The following is a summary of the changes in the Company’s Omnibus Plan employee options during the years ended March 31, 2021, 2022 and 2023:


	Options issued			Weighted average exercise price
Balance outstanding at March 31, 2020		32,508,395		$	34.89
Options granted		478,215			28.15
Options exercised		(7,062,317	)		22.22
Options forfeited		(8,219,982	)		41.27
Balance outstanding at March 31, 2021		17,704,311		$	36.79
Options granted		2,537,290			17.40
Replacement options issued as a result of the acquisition of Supreme Cannabis		140,159			80.53
Options exercised		(445,680	)		12.27
Options forfeited		(3,153,118	)		42.03
Balance outstanding at March 31, 2022		16,782,962		$	33.89
Options granted		4,658,797			4.93
Options exercised		(79,586	)		3.53
Options forfeited		(7,611,285	)		28.80
Balance outstanding at March 31, 2023		13,750,888		$	27.12

The following is a summary of the outstanding stock options as at March 31, 2023:


	Options Outstanding				Options Exercisable
			Weighted Average				Weighted Average
			Remaining				Remaining
	Outstanding at		Contractual Life		Exercisable at		Contractual Life
Range of Exercise Prices	March 31, 2023		(years)		March 31, 2023		(years)
$0.06 - $24.62		5,333,314		4.63		1,300,821		2.61
$24.63 - $33.53		3,062,535		2.36		1,841,655		2.03
$33.54 - $36.80		1,448,009		1.69		1,448,009		1.69
$36.81 - $42.84		1,626,478		1.64		1,620,201		1.62
$42.85 - $67.64		2,280,552		1.85		2,280,552		1.85
		13,750,888		3.00		8,491,238		1.93

At March 31, 2023, the weighted average exercise price of options outstanding and options exercisable was $27.12 and $37.28, respectively (March 31, 2022 – $33.89 and $38.33, respectively).

The Company recorded $6,878 in share-based compensation expense related to Options issued to employees and contractors for the year ended March 31, 2023 (for the year ended March 31, 2022 – $27,163; for the year ended March 31, 2021 – $67,737). The share-based compensation expense for the year ended March 31, 2023 includes an amount related to 1,078,748 options being provided in exchange for services which are subject to performance conditions (for the year ended March 31, 2022 – 1,336,249; for the year ended March 31, 2021 – 2,152,938).

The Company issued replacement options to employees in relation to the acquisition of Supreme Cannabis (Note 29(b)) and during the year ended March 31, 2022, recorded share-based compensation expense $823.

With the exception of nil options which are subject to market-based performance conditions (March 31, 2022 – nil; March 31, 2021 – 17,559) and valued using the Monte Carlo simulation model, the Company uses the Black-Scholes option pricing model to establish the fair value of options granted during the years ended March 31, 2023, 2022 and 2021 on their measurement date by applying the following assumptions:


	March 31,	March 31,	March 31,
	2023	2022	2021
Risk-free interest rate	3.45%	1.09%	0.36%
Expected life of options (years)	3 - 5	3 - 5	1 - 7
Expected volatility	77%	75%	76%
Expected forfeiture rate	19%	18%	17%
Expected dividend yield	nil	nil	nil
Black-Scholes value of each option	$2.92	$9.69	$15.24

Volatility was estimated by using the historical volatility of the Company. The expected life in years represents the period of time that Options granted are expected to be outstanding. The risk-free rate was based on zero coupon Canada government bonds with a remaining term equal to the expected life of the Options.

During the year ended March 31, 2023, 79,586 Options were exercised ranging in price from $0.06 to $8.18 for gross proceeds of $281 (for the year ended March 31, 2022 – 445,680 Options were exercised ranging in price from $0.06 to $36.34 for gross proceeds of $5,567; for the year ended March 31, 2021 – 7,062,317 Options were exercised ranging in prices from $0.06 to $67.64 for gross proceeds of $156,897).

For the year ended March 31, 2023, the Company recorded $18,444 in share-based compensation expense related to RSUs and PSUs (for the year ended March 31, 2022 – $10,709, for the year ended March 31, 2021 – $11,448). The following is a summary of changes in the Company’s RSUs and PSUs during the years ended March 31, 2021, 2022 and 2023:


	Number of RSUs and PSUs
Balance outstanding at March 31, 2020		883,009
RSUs granted		142,826
RSUs released		(120,399	)
RSUs cancelled and forfeited		(152,126	)
Balance outstanding at March 31, 2021		753,310
RSUs and PSUs granted		3,253,671
RSUs and PSUs released		(300,319	)
RSUs and PSUs cancelled and forfeited		(229,370	)
Balance outstanding at March 31, 2022		3,477,292
RSUs and PSUs granted		3,143,098
RSUs and PSUs released		(1,464,934	)
RSUs and PSUs cancelled and forfeited		(2,572,242	)
Balance outstanding at March 31, 2023		2,583,214

During the year ended March 31, 2023, the Company recorded $nil in share-based compensation expense related to acquisition milestones (for the year ended March 31, 2022 – $7,991; for the year ended March 31, 2021 – $8,136).

During the year ended March 31, 2023, 222,421 shares (during the year ended March 31, 2022 – 1,295,285, during the year ended March 31, 2021 – 2,598,978) were released on completion of acquisition milestones. At March 31, 2023, there were up to 125,489 shares to be issued on the completion of acquisition and asset purchase milestones. In certain cases, the number of shares to be issued is based on the volume weighted average share price at the time the milestones are met. The number of shares has been estimated assuming the milestones were met at March 31, 2023. The number of shares excludes shares that are to be issued on July 4, 2023 to the previous shareholders of Spectrum Cannabis Colombia S.A.S. and Canindica Capital Ltd. based on the fair market value of the Company’s Latin American business on that date.

On October 1, 2019, the Company purchased 72% of the outstanding shares of BioSteel. BioSteel has a stock option plan under which non-transferable options to purchase common shares of BioSteel may be granted to directors, officers, employees, or independent contractors of the BioSteel. As at March 31, 2023, the Company had 614,778 (March 31, 2022 – 1,565,300, March 31,

2021 – 1,581,000) options outstanding which vest in equal tranches over a 5-year period. In determining the amount of share-based compensation related to these options, BioSteel used the Black-Scholes option pricing model to establish the fair value of options on their measurement date. The Company recorded $1,143 of share-based compensation expense related to the BioSteel options during the year ended March 31, 2023 with a corresponding increase in noncontrolling interest (year ended March 31, 2022 – $839, March 31, 2021 – $1,169).

For the period from April 1, 2020 to February 23, 2021, the Company recorded $2,659 in share-based compensation expense related to its former subsidiary, RIV Capital. As described in Note 30(c), the Company disposed of its investment in RIV Capital on February 23, 2021.