Constellation Brands acquires stake in medicinal cannabis manufacturer
Company’s investment represents nearly 10 percent ownership stake in Canopy Growth Corp.
Constellation Brands, Victor, N.Y., has signed an agreement to acquire a minority stake in Ontario, Canada-based Canopy Growth Corp., a provider of medicinal cannabis products.
This investment and relationship is consistent with Constellation’s long-term strategy to identify, meet and stay ahead of evolving consumer trends and market dynamics while maintaining focus on its core total beverage alcohol business. Until it is legally permissible to do so at all levels of government, Constellation has no plans to sell any cannabis products in the United State or any other market, it says.
“Canopy Growth has a seasoned leadership team that understands the legal, regulatory and economic landscape for an emerging market that is predicted to become a significant consumer category in the future,” said Rob Sands, Constellation Brands president and chief executive officer, in a statement. “Our company’s success is the result of our focus on identifying early-stage consumer trends, and this is another step in that direction.”
Founded in 2014, Canopy Growth Corp. is one of the earliest commercial players in Canada’s legal cannabis market, it says. The company currently is traded on the Toronto Stock Exchange (TSX) with the symbol “WEED” and has a market cap of more than Canadian $2 billion. The company owns a collection of diverse brands serving customers in Canada and international markets where medicinal cannabis products are legal. In conjunction with this investment, both companies intend to enter into an agreement to exchange knowledge and expertise.
“We are thrilled to have the backing of such a well-established and respected organization such as Constellation Brands,” said Bruce Linton, chairman and chief executive officer of Canopy Growth Corp., in a statement “We look forward to working with the Constellation Brands team to access their deep knowledge and experience in growing brands as we continue to expand our business.”
The investment is expected to approximate Canadian $245 million representing an ownership interest of 9.9 percent of Canopy Growth Corp., plus warrants which give Constellation Brands the option to purchase an additional ownership interest in the future. The transaction is expected to close during the company’s third quarter of fiscal 2018.