Alcoholic-beverage giant Constellation Brands Inc. announced a number of moves intended to further distance itself from struggling Canadian cannabis producer Canopy Growth Corp, following a multibillion-dollar investment in the pot company several years ago.
Constellation STZ, +0.53%, best known for selling the Corona beer brand in the U.S., said that two of its cannabis-focused subsidiaries — Greenstar Canada and CBG Holdings — have converted their common shares in Canopy CGC, +20.65% into non-voting and non-participating exchangeable shares of Canopy.
In doing so, Constellation backed out of deals that gave it influence over Canopy's board and other agreements, including the vast majority of commercial arrangements. Three Constellation-backed Canopy board members — Garth Hankinson, Judy Schmeling, and James Sabia — gave notice that they would resign immediately.
"While we remain supportive of Canopy's strategy, this transaction is expected to eliminate the impact to our equity in earnings and is aligned to our intent to not deploy additional investment in Canopy as we've previously stated in our capital-allocation priorities," Constellation Brands Chief Executive Bill Newlands said in a statement.
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