TORONTO — Global alcohol giant Constellation Brands will invest $5 billion in Canopy Growth Corp. — the largest strategic investment in the cannabis space to date — which the marijuana producer says will help it scale up and fend off competition from established players in big pharma and booze who are hungrily eyeing the pot industry. Constellation Brands is acquiring the new shares at a price of C$48.60 per share, which is a 37.9 percent premium to Canopy's 5-day volume weighted average price of the common shares on the Toronto Stock Exchange ("VWAP"), and a 51.2 percent premium to the closing price on August 14, 2018. This month, Sands doubled down on the initial investment, paying $3.88 billion to raise its total stake to 38% -- a premium of over 50% to the prior-day's close on the Toronto Stock Exchange. Its chief executive Rob Sands called the deal a “powerful partnership” as markets for cannabis are “opening up much more rapidly than appreciated.”

“This is an extremely exciting time to be part of what could potentially be one of the most significant global growth opportunities for the next decade,” Sands told an investor conference call Wednesday. READ MORE: Plants, edibles and drinks, oh my: Smiths Falls’ Canopy Growth inks deal with alcoholic beverage company

Constellation is also receiving 139.7 million new warrants which are exercisable over the next three years. Constellation Brands will increase its ownership interest in Canopy Growth by acquiring 104.5 million shares directly from Canopy Growth, thereby achieving approximately 38 percent ownership when assuming exercise of the existing Constellation warrants.
Constellation Brands, the owner of Corona Beer, announces plans to invest in Canadian marijuana producer Canopy Growth.