how much did constellation pay for canopy

how much did constellation pay for canopy插图

About C$245 million
(Reuters) – Constellation Brands Inc said on Monday it took a 9.9 percent stake in cannabis maker Canopy Growth Corp forabout C$245 million($191.06 million),becoming the first major beer and spirits company to invest in legal cannabis.

How much of Canopy Growth does constellation own?

Collectively, the common shares now increase Constellation Brand’s ownership of Canopy Growth to 38.6 percent of the issued and outstanding common shares. Assuming full exercise of all remaining warrants and full conversion of the notes, Constellation Brands would own a nearly 55.8 percent stake in Canopy Growth.

How will Constellation Brands dispose of its canopy common shares?

Constellation Brands may from time to time acquire or dispose of Common Shares or other securities of Canopy or exercise its warrants in the future, either on the open market or in private transactions, in each case, depending on a number of factors, including general market and economic conditions and other available investment opportunities.

How many common shares does Constellation Brands own?

As a result of the acquisition of new common shares in Canopy Growth, Constellation Brands now indirectly holds a total of 142.25 million common shares, 139.75 million warrants to purchase common shares, and C$200 million principal amount of senior notes.

What happened to Canopy Growth Corporation after it spent $4 billion?

However, the alcohol distributor seems to have stumbled when it spent $4 billion on cannabis grower Canopy Growth (NASDAQ: CGC) in 2017 as that company has struggled and continues to put up sizable losses.

The marijuana producer has been more anchor than sail for the alcoholic beverages distributor

Constellation Brands ‘ ( STZ -2.25%) $190 million investment in Canopy Growth ( CGC 4.41%) in 2017 for a 10% stake in the marijuana producer altered the landscape for the legal weed industry. Because it was the first major company to put money into pot, it bestowed much-needed legitimacy on the industry.

Lurching forward

Canopy Growth’s latest snafu is its delay in introducing its so-called Cannabis 2.0 lineup of marijuana-infused beverages. Instead of the January 2020 launch date it originally promised, Canopy pushed it back to some indefinite time in the future to give it the chance to scale up its production facility.

Overpromise, underdeliver

If this were Canopy’s only blunder, it would be easy to excuse, but the marijuana producer seems to regularly trip itself up.

A glass half empty

That’s good if cannabis-infused drinks are as big as some hope, but like oils and dried flower and leaf demand, this may be a more underwhelming figure than expected. Although some analysts see them growing to $1.4 billion by 2023, where they are legal to buy in the U.S.

What is canopy growth?

Canopy Growth (TSX: WEED) (NYSE: CGC) is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time. The Company has operations in 12 countries across five continents. The Company is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the public’s understanding of cannabis, and through its wholly owned subsidiary, Canopy Health Innovations, has devoted millions of dollars toward cutting edge, commercializable research and IP development. Through partly owned subsidiary Canopy Rivers Corporation, the Company is providing resources and investment to new market entrants and building a portfolio of stable investments in the sector. From our historic public listing on the Toronto Stock Exchange and New York Stock Exchange to our continued international expansion, pride in advancing shareholder value through leadership is engrained in all we do at Canopy Growth. Canopy Growth has established partnerships with leading sector names including cannabis icon Snoop Dogg, breeding legends DNA Genetics and Green House seeds, and Fortune 500 alcohol leader Constellation Brands, to name but a few. Canopy Growth operates ten licensed cannabis production sites with over 4.3 million square feet of production capacity, including over 500,000 square feet of GMP certified production space. For more information visit www.canopygrowth.com.

What is the Constellation brand?

Constellation Brands (NYSE: STZ and STZ.B), a Fortune 500® company, is a leading international producer and marketer of beer, wine and spirits with operations in the U.S., Mexico, New Zealand, Italy and Canada.

Does Constellation own Canopy Growth?

With this investment, Constellation Brands increases its ownership interest in Canopy Growth to approximately 37 percent 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. Constellation estimates the interest expense associated with this transaction to approximate $55 million before tax with an approximate $0.25 impact on fiscal 2019 comparable basis EPS results. Constellation also continues to evaluate the potential equity in earnings impact from the Canopy Growth investment and related items.

Why did Constellation buy Canopy?

Constellation’s original premise for buying a stake in Canopy was that the long-term prospects for the global cannabis industry looked good and Canopy Growth was well-positioned for success in the market. There’s no reason at this point to believe that those assumptions are wrong.

How much did Constellation lose in 2020?

During the first quarter of fiscal 2020, Constellation’s loss from its investment in Canopy Growth was $106 million. In the second quarter, the company’s Canopy-related loss grew to $484.4 million. This brought Constellation’s total losses associated with its investment in Canopy Growth to $593 million.

Is canopy growth profitable?

Those losses will almost certainly continue to mount — Canopy Growth isn’t anywhere close to achieving profitability yet. It probably won’t even report positive EBITDA (earnings before interest, taxes, depreciation, and amortization) until its 2022 fiscal year, which ends March 31, 2022. It will take even longer until Canopy delivers positive earnings, perhaps up to five years from now.

What is the stake in Canopy Growth?

Constellation Brands first acquired a 9.9 percent stake in Canopy Growth in October 2017, as it sought to gain a foothold in the recreational marijuana market. The beer and wine giant later raised its stake in Canopy Growth to 38 percent in August 2018 after it announced an investment of C$5 billion, or $4 billion.

How many common shares does Constellation have?

As a result of the acquisition of new common shares in Canopy Growth, Constellation Brands now indirectly holds a total of 142.25 million common shares, 139.75 million warrants to purchase common shares, and C$200 million principal amount of senior notes.

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