Constellation and Canopy
Mar 11, 2019
In August 2018, Constellation Brands said it would increase its ownership to about 38% and pour another $4 billion US into Canopy. The terms of the deal allow Constellation to take up to a 55% stake — something Sands thinks it will do, calling a still larger investment a "no brainer."
The hefty sum has already spooked investors.
In January, Constellation slashed its 2019 forecast because of additional expenses from the deal and expected weakness in its wine business. Shares of the company plummeted.
Constellation Brands is down 29% from its all-time high. This is strange considering that the US market just opened up for hemp products this year. Anyway, let's see what they do with the US$4 billion in the upcoming months. Given Canopy's mediocre marijuana harvest in the last quarter, I wouldn't be surprised if they acquire a Canadian cannabis firm. Organigram, CannTrust and Aphria are the best targets.
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