Canopy enters partnership with makers of Corona beer

October 31, 2017 by

Tweed SFSmiths Falls-based Canopy Growth announced it has agreed to enter into a strategic relationship with the leading total beverage alcohol supplier in the United, Constellation Brands.

Constellation is a leading international producer and marketer of a fast-growing, high-performing portfolio of beer, wine and spirits brands. As part of the strategic relationship, an affiliate of Constellation will invest approximately C$245 million in Canopy Growth in exchange for common shares that, following the transaction, will represent a 9.9% equity share in the Company. An equal number of common share purchase warrants will also be made available to Constellation, the terms of which are outlined below.

This strategic investment is a sign of confidence in Canopy Growth's reliable track record and vision for responsible yet aggressive market expansion as the world's leading cannabis company.

"In Constellation we have a strategic ally that will join us as we lead the global cannabis sector into the future. We have also strengthened our balance sheet to fund the ambitious expansion efforts we have planned heading into 2018 – a year that will see unprecedented growth in medical and adult-use opportunities," said Bruce Linton, Chairman and CEO, Canopy Growth.

The strategic relationship will see Constellation provide broad support in the areas of consumer analytics, market trending, marketing and brand development to Canopy Growth. In addition, the Companies will collaborate to develop and market cannabis-based beverages that can be marketed as adult-use products in markets where and when such products are federally legal. Owners of a number of iconic brands, Constellation has a proven track record of establishing premium positions across multiple categories.

The transaction has been conditionally approved by the Toronto Stock Exchange and is expected to close in early November, subject to the satisfaction of customary closing conditions.

Submitted in part by Canopy Growth.

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