Constellation Brands gives Canopy Growth another $173.6 million

Constellation Brands gives Canopy Growth another $173.6 million

The beverage manufacturer still believes in Canopy Growth’s future despite a market slowdown

One of the leading cannabis ventures, Canopy Growth Corporation, is reinforcing its confidence on a long-term win with a new capital injection in times where the financial world has been crushed by the coronavirus pandemic. This addition to the company’s capital comes from its partner, alcoholic beverage company Constellation Brands Inc., which is exercising some warrants in order to acquire more shares for a total payment of $173.6 million. The wholly-owned subsidiary of the beverage giant, Greenstar Canada Investment Limited Partnership, is the one exercising the 18,876,901 warrants to purchase common shares of Canopy Growth Inc.

These warrants were issued back on November 2, 2017, and each one was exercised at a price of $9.21. These shares represent 5.1% of the issued and outstanding common shares of the cannabis company. By acquiring new common shares, Constellation Brands indirectly holds, in the aggregate, 142,253,802 common shares, as well as 139,745,453 warrants to purchase common shares. Additionally, it holds a $141,880,000 principal amount of senior notes. Those figures take Constellation Brands’ ownership of Canopy Growth to 38.6% of the total issued and outstanding common shares. Therefore, if the remaining warrants are exercised Constellation Brands would own approximately 55.8% of the issued and outstanding common shares of the cannabis company.

David Klein, CEO of Canopy Growth commented on the news, “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.”

“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,” added Bill Newlands, president and CEO of Constellation Brands.

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