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Constellation Brands ups stake in Canopy Growth, invests an additional US$4bn

Constellation Brands CEO said he sees a 'tremendous growth' opportunity in the cannabis market

Corona bottles
The beverage company produces Corona and Modelo beers

Constellation Brands Inc (NYSE:STZ), the maker of Corona beer, is upping its investment in cannabis with a multi-billion dollar investment. The beer producer is investing US$4bn in Canadian cannabis company Canopy Growth Corp (NYSE:CGC, TSX:WEED).

Constellation’s latest investment brings its stake in the company to 38%. The company held a 9.9% stake in October 2017 with the option for future investments.

Shares of Canopy Growth jumped nearly 50% to US$36.48 in early trading on the news, reversing Tuesday's downward trend after posting less-than-stellar quarterly results.

READ: Canopy Growth reports quarterly earnings in-line with analyst expectations

"Over the past year, we've come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy's market-leading capabilities in this space," said Constellation Brands CEO Rob Sands in a press release.

Constellation Brands shares fell more than 2% to US$216.50 in pre-market trading.

Quick facts: Constellation Brands

Price: 183.65 USD

NYSE:STZ
Market: NYSE
Market Cap: $35.19 billion
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