VICTOR, N.Y., April 18, 2024 (GLOBE NEWSWIRE) -- Constellation Brands, Inc.
(NYSE: STZ), a leading beverage alcohol company, announced today that its
indirect, wholly-owned subsidiaries, Greenstar Canada Investment Limited
Partnership ("Greenstar") and CBG Holdings LLC ("CBG"), have converted (the
"Conversion") their common shares ("Common Shares") of Canopy Growth Corporation
("Canopy") into non-voting and non-participating exchangeable shares of Canopy
("Exchangeable Shares"). The amendment to Canopy's share capital and the
creation of the Exchangeable Shares were authorized by Canopy shareholders at a
special meeting held on April 12, 2024 (the "Amendment"). Greenstar and Canopy
also agreed to exchange (the "Note Exchange" and together with the Conversion,
the "Transactions") C$81.2 million of the principal amount of the C$100 million
promissory note due December 2024 issued by Canopy (the "Note") for Exchangeable
Shares pursuant to an exchange agreement between Greenstar and Canopy (the
"Exchange Agreement"). Pursuant to the Exchange Agreement, Greenstar forgave all
accrued but unpaid interest on the Note together with the remaining principal
amount of the Note. Constellation had previously disclosed its intention to
complete the Transactions following Canopy shareholder approval of the
Amendment.
"We are pleased to complete the conversion of our Common Share ownership
interest in Canopy into Exchangeable Shares," said Bill Newlands,
Constellation's President and CEO. "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."
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 giving effect to the reverse stock split
completed by Canopy in December 2023, and Greenstar also held the Note. Canopy
issued Greenstar 9,111,549 Exchangeable Shares in connection with the Note
Exchange, calculated based on a price per share of C$8.91.
As a result of the Transactions, Greenstar and CBG now hold an aggregate of
26,261,474 Exchangeable Shares, which Constellation believes to be all of the
issued and outstanding Exchangeable Shares as of April 18, 2024, and no other
securities of Canopy.
In connection with the Conversion, Greenstar, CBG, and Canopy have terminated
the investor rights agreement, administrative services agreement, co-development
agreement, and all other commercial arrangements between them and their
subsidiaries, other than the consent agreement pursuant to which Greenstar and
CBG consented to the Amendment, certain termination agreements, and the Exchange
Agreement. As a result, Constellation has no further governance rights in
relation to Canopy, including rights to nominate members to the Board of
Directors of Canopy (the "Canopy Board"), or approval or consulting rights
related to certain transactions of Canopy. All nominees of Constellation
resigned from the Canopy Board effective April 18, 2024.
Pursuant to their terms, the Exchangeable Shares are convertible into Common
Shares on a one-for-one basis at any time at the election of Greenstar and CBG.
Greenstar and CBG do not intend to convert any of their outstanding Exchangeable
Shares for Common Shares or own any Common Shares, in each case until such time
as the U.S. domestic sale of marijuana could not reasonably be expected to
violate the Controlled Substances Act, the Civil Asset Forfeiture Reform Act (as
it relates to violation of the Controlled Substances Act), and all related
applicable anti-money laundering laws. For early warning reporting purposes,
Constellation will be deemed to beneficially own the Common Shares issuable on
conversion of the Exchangeable Shares. Based on the assumptions noted above and
assuming no further issuances of Common Shares or Exchangeable Shares, if
Constellation were to convert all such 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).
IMPORTANT ADDITIONAL INFORMATION
Constellation has no other present plans or future intentions that relate to
Canopy. Constellation may from time to time dispose of Exchangeable Shares or
other securities of Canopy, convert its Exchangeable Shares into Common Shares
(provided that Constellation does not intend to convert any of its outstanding
Exchangeable Shares for Common Shares or own any Common Shares, in each case
until such time as the U.S. domestic sale of marijuana could not reasonably be
expected to violate the Controlled Substances Act, the Civil Asset Forfeiture
Reform Act (as it relates to violation of the Controlled Substances Act), and
all related applicable anti-money laundering laws), dispose of any Common Shares
acquired upon exchange of Exchangeable Shares, or conduct other transactions, in
the future, either on the open market or in private transactions, in each case,
depending on a number of factors, including general market and economic
conditions, other available investment opportunities, regulatory developments,
or other factors determined by Constellation. Depending on market conditions,
general economic and industry conditions, Canopy's business and financial
condition, and/or other relevant factors, Constellation may develop other plans
or intentions in the future.
A copy of the early warning report filed in connection with this press release
will be available on Canopy's profile on SEDAR+ at www.sedarplus.ca
(https://www.sedarplus.ca/landingpage/) or may be obtained by contacting
Constellation's Investor Center at 1?888-922-2150.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements. All statements other than
statements of historical fact are forward-looking statements. The word "expect"
and similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain such identifying words.
These statements may relate to business strategy, future operations, prospects,
plans and objectives of management, as well as information concerning expected
actions of third parties, including statements related to the Exchangeable
Shares, Canopy's strategy, the impact to Constellation's equity in earnings,
Constellation's intent to not deploy additional investment in Canopy, and
potential future transactions. All forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
set forth in, or implied by, such forward-looking statements. No assurances can
be given that any of the events anticipated by the forward-looking statements
will transpire or occur.
The forward-looking statements are based on management's current expectations
and should not be construed in any manner as a guarantee that such actions will
in fact occur or will occur on the timetable contemplated hereby. All forward-
looking statements speak only as of the date of this news release and
Constellation undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events, or otherwise.
In addition to risks and uncertainties associated with ordinary business
operations, the forward-looking statements contained in this news release are
subject to other risks and uncertainties, including the accuracy of all
projections and other factors and uncertainties disclosed from time-to-time in
Constellation's filings with the Securities and Exchange Commission, including
its Annual Report on Form 10-K for the fiscal year ended February 28, 2023 and
Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2023,
which could cause actual future performance to differ from current expectations.
Constellation disclaims any responsibility for all disclosure issued by Canopy.
ABOUT CONSTELLATION BRANDS
Constellation Brands (NYSE: STZ) is a leading international producer and
marketer of beer, wine, and spirits with operations in the U.S., Mexico, New
Zealand, and Italy. Our mission is to build brands that people love because we
believe elevating human connections is Worth Reaching For. It's worth our
dedication, hard work, and calculated risks to anticipate market trends and
deliver more for our consumers, shareholders, employees, and industry. This
dedication is what has driven us to become one of the fastest-growing, large CPG
companies in the U.S. at retail, and it drives our pursuit to deliver what's
next.
Every day, people reach for our high-end, iconic imported beer brands such as
those in the Corona brand family like the flagship Corona Extra, Modelo Especial
and the flavorful lineup of Modelo Cheladas, Pacifico, and Victoria; our fine
wine and craft spirits brands including The Prisoner Wine Company, Robert
Mondavi Winery, Casa Noble Tequila, and High West Whiskey; and our premium wine
brands such as Kim Crawford and Meiomi.
As an agriculture-based company, we have a long history of operating sustainably
and responsibly. Our ESG strategy is embedded into our business and our work
focuses on serving as good stewards of the environment, enhancing social equity
within our industry and communities, and promoting responsible beverage alcohol
consumption. These commitments ground our aspirations beyond driving the bottom
line as we work to create a future that is truly Worth Reaching For.
To learn more, visit www.cbrands.com (http://www.cbrands.com) and follow us on X
(https://twitter.com/cbrands), Instagram
(https://www.instagram.com/constellationbrands/), and LinkedIn
(https://www.linkedin.com/company/constellation-brands).
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 MEDIA CONTACTS                          INVESTOR RELATIONS CONTACTS
 Amy Martin 585-678-7141 /               Snehal Shah 847-385-4940 /
 amy.martin@cbrands.com                  snehal.shah@cbrands.com
 (mailto:amy.martin@cbrands.com)         (mailto:snehal.shah@cbrands.com)
 Carissa Guzski 315-525-7362 /           David Paccapaniccia 585-282-7227 /
 carissa.guzski@cbrands.com              david.paccapaniccia@cbrands.com
 (mailto:carissa.guzski@cbrands.com)     (mailto:david.paccapaniccia@cbrands.co
                                         m)

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