USA – Constellation Brands, a leading beverage alcohol company, has acquired an additional 5.1% stake in Canadian CDB-infused beverage company, Canopy Growth Corporation for C$245 million (US$177.22 million).
As a result of the acquisition of new common shares, which was made through Greenstar Canada Investment Limited Partnership, an indirect, wholly-owned subsidiary of Constellation Brands, the company now owns 38.6% stake in Canopy Growth.
The Corona beer brand owner said that the additional investment in Canopy Growth further reinforces its confidence in the CBD-infused beverage company’s ability to win long-tern in the emerging Cannabis industry.
Founded in 2013, Canopy Growth has cemented itself as the industry leader in Canada’s legal cannabis market. The company first attracted an investment from Constellation Brands in 2017 when the company acquires a 9.9% minority stake for US$245 million.
Since then the company has progressively increased its interests in Canopy Growth and in August 2018, Constellation pumped around US$4 billion in the company.
“While global legalization of cannabis is still in its infancy, we continue to believe the long-term opportunity in this evolving market is substantial,” said Bill Newlands, president and chief executive officer, Constellation Brands.
“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.”
“This additional investment validates the work our team has done since attracting the initial investment in 2017. It also strengthens our ability to pursue the immense market and product opportunities available to Canopy in Canada, the U.S. and other key global markets,” said David Klein, chief executive officer, Canopy Growth.
Constellation Brands further revealed that it may from time to time acquire or dispose of common shares or other securities of Canopy Growth or exercise its warrants in the future, either on the open market or in private transactions.
“Depending on market conditions, general economic and industry conditions, Canopy Growth’s business and financial condition and/or other relevant factors, Constellation Brands may develop other plans or intentions in the future,” the company said in a statement.