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. All directors, officers, employees and independent contractors of the Company are eligible to receive awards of common share purchase options (“Options”), restricted share units (“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.

Under the Omnibus Plan, the maximum number of shares issuable from treasury pursuant to Awards shall not exceed 15% of the total outstanding shares from time to time less the number of shares issuable pursuant to all other security-based compensation arrangements of the Company. The maximum number of common shares reserved for Awards is 57,431,277 at March 31, 2021 (March 31, 2020 – 52,516,939). As of March 31, 2021, the only Awards issued have been options and RSUs under the Omnibus Plan.

The Omnibus Plan is administered by the Board of Directors of the Company who establishes exercise prices, at not less than the market price at the date of grant, and expiry dates. Options under the Omnibus Plan generally remain exercisable in increments with 1/3 being exercisable on each of the first, second and third anniversaries from the date of grant, with expiry dates set at ten years from issuance. The Board of Directors has the discretion to amend general vesting provisions and the term of any award, subject to limits contained in the Omnibus Plan.

The Employee Share Purchase Plan (the “Purchase Plan”) is the Company’s only other share-based compensation arrangement. Under 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, 2021, 37,312 common shares have been issued under the Purchase Plan.

The following is a summary of the changes in the Company’s Omnibus Plan employee options during the years ended March 31, 2019, 2020 and 2021:

	Options issued			Weighted average exercise price
Balance outstanding at March 31, 2018		17,245,835		$	12.95
Options granted		22,145,198			51.49
Replacement options issued as a result of the CHI acquisition		568,005			14.98
Replacement options issued as a result of the Hiku acquisition		291,629			10.64
Options exercised		(5,318,923	)		11.48
Options forfeited/cancelled		(2,099,849	)		55.37
Balance outstanding at March 31, 2019		32,831,895		$	34.10
Options granted		9,454,714			33.87
Options exercised		(3,900,032	)		10.63
Options forfeited/cancelled		(5,878,182	)		44.95
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

The following is a summary of the outstanding stock options as at March 31, 2021:

	Options Outstanding				Options Exercisable
			Weighted Average				Weighted Average
			Remaining				Remaining
	Outstanding at		Contractual Life		Exercisable at		Contractual Life
Range of Exercise Prices	March 31, 2021		(years)		March 31, 2021		(years)
$0.06 - $24.62		2,453,326		3.35		1,487,082		2.60
$24.63 - $33.53		4,101,039		4.11		2,135,373		3.61
$33.54 - $36.80		3,565,712		3.69		2,235,097		3.67
$36.81 - $42.84		3,149,145		3.92		1,691,484		3.52
$42.85 - $67.64		4,435,089		3.88		2,434,908		3.76
		17,704,311		3.83		9,983,944		3.49

At March 31, 2021, the weighted average exercise price of options outstanding and options exercisable was $36.79 and $36.97, respectively (March 31, 2020 – $34.89 and $31.84, respectively).

The Company recorded $67,737 in share-based compensation expense related to Options issued to employees and contractors for the year ended March 31, 2021 (for the year ended March 31, 2020 – $248,450, for the year ended March 31, 2019 – $151,813). The share-based compensation expense for the year ended March 31, 2021 includes an amount related to 2,152,938 options being provided in exchange for services which are subject to performance conditions (for the year ended March 31, 2020 – 2,160,068, for the year ended March 31, 2019 – 595,000).

During the year ended March 31, 2019, the Company issued replacement options to employees in relation to the acquisitions of CHI and Hiku Brands Company Ltd. (“Hiku”) (Note 30) and recorded share-based compensation expense of $10,917, related to these replacement options, of which $7,503 relates to an immediate share-based compensation expense recorded at the CHI acquisition date to reflect the accelerated vesting of certain CHI replacement options.

With the exception of 17,559 options which are subject to market-based performance conditions (March 31, 2020 – 571,689) 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, 2021, 2020 and 2019 on their measurement date by applying the following assumptions:

	March 31,	March 31,	March 31,
	2021	2020	2019
Risk-free interest rate	0.36%	1.38%	2.00%
Expected life of options (years)	1 - 7	3 - 5	2 - 5
Expected volatility	76%	73%	75%
Expected forfeiture rate	17%	12%	12%
Expected dividend yield	nil	nil	nil
Black-Scholes value of each option	$15.24	$19.83	$24.98

Volatility was estimated by using the historical volatility of the Company and other companies that the Company considers comparable that have trading and volatility history prior to the Company becoming public. 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, 2021, 7,062,317 Options issued under the Omnibus Plan were exercised ranging in price from $0.06 to $67.64 for gross proceeds of $156,897 (for the year ended March 31, 2020 – 3,900,032 Options issued under the Omnibus Plan were exercised ranging in price from $0.06 to $40.68 for gross proceeds of $41,413, for the year ended March 31, 2019 – 5,318,923 Options under the Omnibus Plan were exercised ranging in prices from $0.56 to $40.68 for gross proceeds of $48,159).

During the year ended March 31, 2021, the Company issued 142,826 RSUs under the Omnibus Plan. For the year ended March 31, 2021, the Company recorded $11,448 in share-based compensation expense related to these RSUs (for the year ended March 31, 2020 – $2,308, for the year ended March 31, 2019 – $3,709). The following is a summary of changes in the Company’s RSUs during the years ended March 31, 2019, 2020 and 2021:

	Number of RSUs
Balance outstanding at March 31, 2018		-
RSUs granted		201,821
RSUs released		(52,871	)
RSUs cancelled and forfeited		(11,722	)
Balance outstanding at March 31, 2019		137,228
RSUs granted		875,673
RSUs released		(29,892	)
RSUs cancelled and forfeited		(100,000	)
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

Share-based compensation expense related to acquisition milestones is comprised of:

	Years ended
	March 31,		March 31,		March 31,
	2021		2020		2019
Canindica	$	2,398	$	15,308	$	42,499
Spectrum Colombia		-		34,861		28,893
Spectrum Denmark		-		550		9,895
Other		5,738		11,453		18,877
	$	8,136	$	62,172	$	100,164

During the year ended March 31, 2021, 2,598,978 shares (during the year ended March 31, 2020 – 1,121,605, during the year ended March 31, 2019 – 2,455,446) were released on completion of acquisition milestones. At March 31, 2021, there were up to 3,153,585 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, 2021. The number of shares excludes shares that were to be issued on July

4, 2023 to the previous shareholders of Spectrum Colombia and Canindica based on the fair market value of the Company’s Latin American business on that date. See Note 16 for further information.

In the year ended March 31, 2020, as a result of the restructuring of our operations in Colombia and Lesotho, the Company accelerated share-based compensation expense relating to the unvested milestones associated with the acquisitions of Spectrum Colombia, Canindica, and DCL in the year ended March 31, 2019. Accordingly, the Company recognized share-based compensation expense of $32,694 in the year ended March 31, 2020. See Note 5 for further information.

During the year ended March 31, 2021, the Company recorded share-based payments of $nil (during the year ended March 31, 2020 – $nil, during the year ended March 31, 2019 – $4,781) related to shares issued for payment of royalties and sales and marketing services.

On October 1, 2019, the Company purchased 72% of the outstanding shares of BioSteel Sports Nutrition Inc. (“BioSteel”) (see Note 30(b)(iii)). 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, 2021, the Company had 1,581,000 (March 31, 2020 – 1,008,000) 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 $1,169 (year ended March 31, 2020 – $489) of share-based compensation expense related to the BioSteel options during the year ended March 31, 2021 with a corresponding increase in noncontrolling interest.

On May 12, 2017, seed capital options were issued. These seed capital options consisted of 10,066,668 SVS that were issued by way of share purchase loans. Since they were issued through loans, they are not considered issued for accounting purposes until the loan is repaid. The seed capital options were measured at fair value on May 12, 2017, using a Black-Scholes option pricing model and will be expensed over their vesting period. Where there are performance conditions in addition to service requirements RIV Capital has estimated the number of shares it expects to vest and is amortizing the expense over the expected vesting period.

	Seed capital options issued			Seed capital loan balance
Balance outstanding at March 31, 2018		10,066,668		$	503
Options exercised		(6,227,776	)		(311	)
Balance outstanding at March 31, 2019		3,838,892		$	192
Options exercised		(999,998	)		(50	)
Options forfeited		(33,334	)		(2	)
Balance outstanding at March 31, 2020		2,805,560		$	140
Options exercised		(1,905,559	)		(95	)
Options forfeited		(533,334	)		(26	)
Options expired		(333,333	)		(17	)
Balance outstanding at February 23, 2021		33,334		$	2

RIV Capital had a long-term incentive plan (“LTIP”) under which non-transferable options, RSUs, PSU, stock appreciation rights, and restricted stock may be granted to directors, officers, employees, or other eligible service providers of RIV Capital. Pursuant to the LTIP, the maximum number of SVS issuable from treasury pursuant to outstanding options, RSUs and PSUs was not to exceed 10% of the issued and outstanding SVS and MVS, on an aggregate basis.

The LTIP was administered by the Board of Directors of RIV Capital who established exercise prices, at not less than the market price at the date of the grant, and expiry dates. Options under the LTIP generally became exercisable in increments, with one-third being exercisable on each of the first, second, and third anniversaries from the date of grant, and had expiry dates five years from the date of grant. The Board of Directors of RIV Capital had the discretion to amend general vesting provisions and the term of any option grant, subject to limits contained in the LTIP. The seed capital options were not within the scope of the LTIP.

The following is a summary of the changes in RIV Capital’s stock options, excluding the seed capital options presented separately, during the years ended March 31, 2019 and 2020, and during the period from April 1, 2020 to the completion of the RIV Arrangement on February 23, 2021:

	Options issued			Weighted average exercise price
Balance outstanding at March 31, 2018		5,915,000		$	0.68
Options granted		6,762,137			3.32
Options exercised		(154,882	)		0.78
Balance outstanding at March 31, 2019		12,522,255		$	1.98
Options granted		2,068,000			3.38
Options exercised		(1,244,997	)		0.90
Options forfeited		(166,667	)		0.60
Options expired		(112,587	)		3.33
Balance outstanding at March 31, 2020		13,066,004		$	2.31
Options granted		-			-
Options exercised		(2,175,001	)		0.64
Options expired		(632,667	)		3.59
Options forfeited		(643,336	)		2.67
Balance outstanding at February 23, 2021		9,615,000		$	2.72

In determining the amount of share-based compensation related to options issued during the year, RIV Capital used the Black-Scholes option pricing model to establish the fair value of options granted in the period from April 1, 2020 to February 23, 2021, and the years ended March 31, 2020 and 2019 on their measurement date by applying the following assumptions:

	March 31,		March 31,	March 31,
	2021		2020	2019
Risk-free interest rate		-	1.40%	1.70%
Expected life of options (years)		-	3 - 4	0.4 - 4
Expected volatility		-	70%	70%
Expected forfeiture rate		-	nil	nil
Expected dividend yield		-	nil	nil
Black-Scholes value of each option		-	$1.69	$1.80

Volatility was estimated using companies that RIV Capital considered comparable that have trading and volatility history prior to RIV Capital becoming public. 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.

In the period from April 1, 2020 to February 23, 2021, the Company recorded $1,933 (year ended March 31, 2020 – $6,567, year ended March 31, 2019 – $6,844) in share-based compensation expense related to these options and the seed capital options with a corresponding increase to noncontrolling interests.

In the period from April 1, 2020 to February 23, 2021, RIV Capital granted 28,884 (year ended March 31, 2020 – 356,308, year ended March 31, 2019 – none) restricted share units which vest immediately. For the year ended, the Company recorded $190 (year ended March 31, 2020 – $290, year ended March 31, 2019 – $nil) of share-based compensation expense related to these restricted share units.

In the period from April 1, 2020 to February 23, 2021, RIV Capital granted 1,210,000 (years ended March 31, 2019 and 2020 – none) performance share units which vest over a three-year period. In the period from April 1, 2020 to February 23, 2021, 330,000 performance share units were forfeited (years ended March 31, 2019 and 2020 – none). In the period from April 1, 2020 to February 23, 2021, the Company recorded $536 (years ended March 31, 2019 and 2020 – $nil) of share-based compensation expense related to these performance share units.