Corona beer parent company bets big on marijuana

Lloyd Doyle
August 16, 2018

Canopy's target acquisition list exceeds $1 billion for worldwide assets and non-cultivation assets in Canada, Linton said. Constellation shares slid 8 percent to $203.73 in NY.

"Our business can now make the strategic investments required to accelerate our market position globally", said Bruce Linton, co-chief executive of Canopy Growth.

"This could potentially be one of the most significant global growth opportunities for the next decade", Sands said. Heineken NV's Lagunitas craft-brewing label has launched a brand specializing in non-alcoholic drinks infused with THC, marijuana's active ingredient.

The U.S., where cannabis is legal for medical or recreational use in several states but remains illegal at the federal level, is the "best market" and will become "federally legal sooner than people think", he said.

Legal sales in Canada are expected to reach $4.9 billion by 2022 and consumer spending globally will hit $32 billion, triple current levels, according to a report by USA cannabis research firms Arcview Market Research and BDS Analytics this week. The U.S. legal cannabis industry is gaining economic and political clout, employing more than 200,000 workers, while the market for listed firms has exploded in Canada.

This transaction also provides further (and needed) affirmation that big alcohol and multi-national CPG's are committed to the cannabis sector for the long term.

Canopy, based in Smiths Falls, Ontario, has specialized in the medical product and doesn't now have operations south of the border.

Canopy shares closed at $32.15 on the Toronto Stock Exchange on Tuesday. Canopy's share price has nearly tripled.

Constellation said neither company plans to sell cannabis products in the United States until it is allowed to do so at all government levels.

"Canopy Growth remains committed to not entering the US market in any manner that would contravene USA federal laws", the company said in a statement.

Hold onto your hats everyone, an absolutely epic Canopy Growth Corp (TSE:WEED) (NYSE:CGC) (FRA:11L1) fueled cannabis sector upswing is expected to kick-off in the next 60 minutes. "We view the Canopy/Constellation news as further proof that a global market opportunity awaits, with Canadian-listed companies well positioned to participate given their head start and superior access to capital", he said.

In the release, the companies announced that Constellation Brands will acquire new shares at a price of C$48.60 per share, representing a 37.9% premium to Canopy's 5-day volume weighted average price of common shares on the TSX.

Constellation is also receiving 139.7 million new warrants which are exercisable over the next three years.

The agreement Wednesday will also see Constellation nominate four directors to Canopy Growth's seven-member board of directors.

Canopy Growth will remain a Canadian company with its headquarters in Smiths Falls, Ontario, and will continue to be led by its existing management team.

Through this investment, we are selecting Canopy Growth as our exclusive global cannabis partner...

Other reports by Iphone Fresh

Discuss This Article