A deal that could see U.S.-based alcohol giant Constellation Brands Inc. take a majority ownership stake in leading cannabis producer Canopy Growth Corp. will be reviewed by the federal government, a spokesperson for Innovation, Science and Economic Development Canada confirmed Aug. 17.
Smiths Falls, Ont.-based Canopy and Victor, New York’s Constellation announced a proposed transaction Wednesday that involves Constellation investing approximately $5 billion in Canopy in a deal that could raise it’s stake in the marijuana firm to around 38 percent.
The deal also includes warrants that could let Constellation buy even more shares of Canopy potentially growing Constellation’s ownership in Canopy above 50 per cent — at a cost of at least another $4.5 billion. What’s more, the proposed transaction would also allow Constellation to nominate four of the seven directors on Canopy’s board.
Pending shareholder and regulatory approval, the deal is scheduled to close by the end of October.
Top photo courtesy of Adobe Stock
