Constellation Brands Announces Conversion of Common Shares and Exchange of Promissory Note Into Exchangeable Shares of Canopy Growth Corporation

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.