Constellation Brands Moves into Medical Cannabis
Constellation Brands, a leading international producer and marketer of beer, wine and spirits with operations in the US, Mexico, New Zealand, Italy and Canada, has closed its C$5 billion (US$4 billion) investment in Canopy Growth, a diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. The transaction was approved by an overwhelming majority of Canopy Growth shareholders and has been granted all required regulatory approvals, including by the Canadian government under the Investment Canada Act.
The investment provides Canopy Growth with significant funding needed to build scale in the more than 30 countries currently pursuing federally permissible medical cannabis programs, while establishing the foundation needed to supply new recreational adult-use markets as cannabis becomes legal in markets around the world.
“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,” says Rob Sands, chief executive of Constellation Brands. “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.”
With this investment, Constellation Brands increases its ownership interest in Canopy Growth to approximately 37% of outstanding common shares of Canopy Growth and has appointed two members of its executive team, as well as two independent directors, to the board of directors of Canopy Growth.
“Our cash position opens up a world of opportunity for us,” says Bruce Linton, chairman and co-chief executive of Canopy Growth. “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.”
