Constellation Brands Inc, (NYSE: STZ) and Canopy Growth Corporation (TSX: WEED)(NYSE: CGC) announced today that they had finalized a USD 4 billion investment between the two previously announced back on August 15th, 2018.
The transaction, which was approved by almost all shareholders, has also been granted complete regulatory approval from the Canadian government.
This influx of funding will provide Canopy with sufficient funding to help expand their operations in over 30 countries where they are trying to acquire medical cannabis permissions. At the same time, Constellation Brands increases their ownership of Canopy to around 37 percent of all outstanding shares along with appointing two members of its executive team and two independent directors.
“We’re excited to expand our strategic partnership with Canopy Growth and to begin helping them build the global scale needed to win long-term. The global cannabis market presents a significant growth opportunity and Canopy growth is well-positioned to establish a strong leadership position in this fast-evolving category,” said Constellation Brands CEO Rob Sands. “Our cash position opens up a world of opportunity for us. Relative to our valuation, we have never been in a better position to create shareholder value. This investment was a landmark moment for the entire sector when it was announced. Now that the capital is Canopy’s to deploy, we’re going to quickly get to work increasing our lead by adding strategic assets around the world,” he added.
Earlier this week, Canopy announced that it acquired a number of hemp-based companies, including research firm ebbu for $25 million in cash, $450 million worth of Canopy shares, and further $100 million in potential milestone performance payments. These moves have been a part of a larger corporate strategy of consolidation in the hemp industry, both domestically as well.
When news of this $4 billion investment first broke, shares of Canopy surged by over 30 percent in a single day, closing at $32.11 per share on August 15th, 2018. Today, shares only moved up by 0.38% in light of this confirmation, sitting at 37.03 per share. Regardless of stock price moves, however, the approval of this new wave of funding is seen as another positive sign for the companies future growth potential.
Constellation Brands Inc Company Profile
Constellation Brands (NYSE: STZ and STZ.B), a Fortune 500® company, is a leading international producer and marketer of beer, wine and spirits with operations in the U.S., Mexico, New Zealand, Italy and Canada. Constellation is the No. 3 beer company in the U.S. with high-end, iconic imported brands such as Corona Extra, Corona Light, Modelo Especial, Modelo Negra and Pacifico. – Constellation Brands
Canopy Growth Corp Company Profile
Canopy Growth (TSX: WEED) (NYSE:CGC) is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time. The Company has operations in 12 countries across five continents. – Canopy