Constellation Brands increases stake in Canopy Growth Corp

By Rachel Arthur

- Last updated on GMT


Related tags Constellation brands Cannabis

Constellation Brands has increased its ownership of cannabis company Canopy Growth Corp to 38.6%.

Beer, wine and spirit producer Constellation Brands initially took a 9.9% stake in the Canadian company in 2017, with the aim of collaborating to develop and market cannabis-based beverages. It upped this stake the following year.​  

On Friday the two companies announced the exercise by Greenstar Canada Investment Limited Partnership, an indirect, wholly-owned subsidiary of Constellation Brands, of an aggregate of 18,876,901 warrants to purchase common shares of Canopy Growth.

The warrants, which were originally issued on November 2, 2017, were exercised at an exercise price of C$12.9783 per common share for an aggregate of approximately C$245m. Upon issuance, the common shares represented approximately 5.1% of the issued and outstanding common shares of Canopy Growth.

Collectively, the common shares increase Constellation Brand’s ownership of Canopy Growth to 38.6% of the issued and outstanding common shares. Assuming full exercise of all remaining warrants and full conversion of the notes, Constellation Brands would own approximately 55.8% of the issued and outstanding common shares of Canopy Growth.

Bill Newlands, president and chief executive officer, Constellation Brands, said: “While global legalization of cannabis is still in its infancy, we continue to believe the long-term opportunity in this evolving market is substantial. Canopy is best positioned to win in the emerging cannabis space and we are confident in the strategic direction of the company under David Klein and his team.”

Founded in 2014, Canopy Growth was one of the earliest players in Canada’s legal cannabis market. It announced it had started producing cannabis-infused beverages at its facility in Smith Falls, Ontario, in November.

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