New York-based Constellation Brands has announced that it is set to purchase a 10% stake in the world’s largest publicly traded cannabis company, Ontario-based Canopy Growth Corporation.
By acquiring the minority stake in the cannabis producer, Constellation brands is aiming to stay ahead of consumer trends, with the company’s CEO expecting the legalisation of marijuana to continue and, in turn, market growth.
“Canopy Growth has a seasoned leadership team that understands the legal, regulatory and economic landscape for an emerging market that is predicted to become a significant consumer category in the future,” Sands said. “Our company’s success is the result of our focus on identifying early stage consumer trends, and this is another step in that direction.”
Canopy Growth currently has a market capitalisation of more than $2bn, largely helped by the legalisation of Cannabis within Canada, with its share price having more than doubled over the past 12 months.
“We are thrilled to have the backing of such a well-established and respected organization such as Constellation Brands,” said Bruce Linton, Chairman and Chief Executive Officer, Canopy Growth Corporation. “We look forward to working with the Constellation Brands team to access their deep knowledge and experience in growing brands as we continue to expand our business.”
The sum of the investment stands at C$245mn (US$191mn), with the transaction expected to complete during the third quarter of fiscal 2018.