Constellation Brands, Inc. announced the completion of a transaction involving its subsidiaries, Greenstar Canada Investment Limited Partnership and CBG Holdings LLC, converting their common shares of Canopy Growth Corporation into non-voting, non-participating exchangeable shares. This transformation was facilitated by a shareholder-approved amendment on April 12, 2024, and included an exchange of C$81.2 million of a C$100 million promissory note due in December 2024 for the newly formed exchangeable shares.

Constellation's subsidiaries forgave all accrued but unpaid interest on the note, alongside the remaining principal as part of the exchange agreement. Through this agreement, Greenstar and CBG terminated existing commercial arrangements with Canopy, relinquishing governance rights, including board nominations and certain approval rights. This transaction aligns with Constellation's strategy to reduce its investment exposure while supporting Canopy’s ongoing strategies.

As a result, Greenstar and CBG now hold 26,261,474 exchangeable shares, which are believed to be all the exchangeable shares issued as of April 18, 2024, and have no other securities in Canopy. The exchangeable shares are convertible into common shares on a one-for-one basis but will not be converted until the sale of marijuana in the U.S. is no longer in conflict with certain federal laws. If converted, Constellation would own approximately 26.2% of Canopy’s issued and outstanding common shares. The transaction underscores a strategic shift in Constellation's involvement with Canopy, focusing on minimizing impact to its equity earnings without additional capital investment.