$4B buy sends grass joint to new highs
Constellation Brands, the maker of Corona beer, sent the market abuzz with its mind-boggling $4 billion investment in Canada’s top marijuana producer.
It’s the largest stash ever put down on a cannabis stock and sent Canopy Growth Corp. surging more than 30 percent, to close Wednesday at $32.11 per share in New York trading. The Canadian grower now has a market cap of $7.2 billion — larger than Harley Davidson and toymaker Mattel.
The new investment from Constellation towers over its initial $190 million that the spirits maker pumped into Canopy Growth last October.
That investment, which at the time ranked as the cannabis industry’s largest, gave Constellation a 10 percent interest in the Ontario-based weed grower, which it now calls its “exclu-
sive global cannabis partner.”
Wednesday’s $4 billion golden egg boosted Constellation’s stake in Canopy Growth to 38 percent, but also included terms for the Victor, NY, beer, wine and spirits manufacturer to assume majority control.
“If Constellation exercises all its existing and new warrants, it could increase its stake to more than 50 percent,” the companies said in a joint statement.
The deal is expected to close in October after regulatory review in both countries — the same month recreational weed becomes legal in Canada.
But Canopy Growth, already established in 11 countries, plans to deploy its massive cash infusion outside of Canada, with an eye toward south of the border.
“Management views other jurisdictions, including the United States, as strategic priorities,” the companies said.