Constellation Brands, Inc. has announced the conversion of its common shares of Canopy Growth Corporation into non-voting and non-participating exchangeable shares. This conversion was authorized by Canopy shareholders at a special meeting held on April 12, 2024. Prior to the completion of the transactions, Greenstar and CBG held an aggregate of 17,149,925 common shares, representing approximately 18.8% of the issued and outstanding common shares. After the completion of the transactions, Greenstar and CBG now hold an aggregate of 26,261,474 exchangeable shares, which is believed to be all of the issued and outstanding exchangeable shares as of April 18, 2024.
Canopy issued Greenstar 9,111,549 exchangeable shares in connection with the exchange of a promissory note, calculated based on a price per share of C$8.91. As a result of the transactions, Constellation Brands has no further governance rights in relation to Canopy, including rights to nominate members to the board of directors or approval rights related to certain transactions of Canopy. All nominees of Constellation resigned from the Canopy board effective April 18, 2024.
The exchangeable shares are convertible into common shares on a one-for-one basis at any time at the election of Greenstar and CBG. However, they do not intend to convert any of their outstanding exchangeable shares for common shares or own any common shares until such time as the U.S. domestic sale of marijuana could not reasonably be expected to violate specific acts and laws.
If Constellation were to convert all exchangeable shares into common shares, it would hold an aggregate of 26,261,474 common shares, representing approximately 26.2% of the currently issued and outstanding common shares, inclusive of the as-converted exchangeable shares.
Constellation has no present plans or future intentions that relate to Canopy, but it may from time to time dispose of exchangeable shares or other securities of Canopy, convert its exchangeable shares into common shares, dispose of any common shares acquired upon exchange of exchangeable shares, or conduct other transactions in the future, depending on various factors.
A copy of the early warning report filed in connection with this press release will be available on Canopy’s profile on SEDAR+ or may be obtained by contacting Constellation’s investor center. Following these announcements, the company's shares moved 1.1%, and are now trading at a price of $261.52. If you want to know more, read the company's complete 8-K report here.
