Constellation Brands Inc. has increased its stake in Canopy Growth Corp. by 5.1 percent, bringing its total stake in the Canadian cannabis producer to 38.6 percent. The company said it exercised C$245 million (USD$174.29 million) worth of warrants.
In addition to those shares, Constellation also has warrants and senior notes which, if exercised and converted, would bring its ownership stake in Canopy to 55.8 percent. Constellation said the company now holds over 142 million Canopy shares as well as almost 140 million warrants to purchase shares and senior notes worth C$200 million (USD$142.28).
Bill Newlands, Constellation president and CEO, described Canopy as the “best positioned to win in the emerging cannabis space” and the company is “confident in the strategic direction” of Canopy under CEO David Klein and his team.
“While global legalization of cannabis is still in its infancy, we continue to believe the long-term opportunity in this evolving market is substantial.” – Newlands in a statement
Klein is a former executive vice president and chief financial officer for Constellation who took over the reins of Canopy last December from Mark Zekulin, who took over as sole CEO following the ouster of company founder Bruce Linton.
Recently, however, Canopy has announced sweeping changes to its business. In March, the company shuttered two greenhouses in Delta and Aldergrove, British Columbia, Canada, cutting 500 jobs in the process.
The following month, the company said it would sell its operations in South Africa and Lesotho, close its indoor cultivation facility in Yorkton, Saskatchewan, shut down its hemp farming operations in Springfield, New York, and close its Colombia-based cultivation facility.
The firm laid off another 200 employees last month in the U.S., Canada, and the United Kingdom.
The warrants that were exercised were due to expire on May 1 if no investment was made. Constellation also has further warrants which expire in November 2023.
Exclusive offer from our sponsor:
Get daily news insights in your inbox. Subscribe