RE:RE:STZ Constellation STZ could buy out Canopy at any time but keepng in mind that cash is king, why would they spend the money! They already have the driver's seat and anytime they want they can exercise those options.
Constellation has enough clout and cashflow that they can do lots of things but really have positioned themselves quite nicely with the financing deals with US MSOs and they have done it in a fashion that hasn't drawn fire from protectionists and such.
Same for Canopy taking out Acreage. They already have themselves positioned to rto 70% of Acreage Holding's stock. They paid over $30 million when they revisited that deal, to revisit and renegotiate the outrageous deal that was inked in the good old days of crazy-azz pricing. They just need to print up some new shares, about 250,000 by my calculation to do a 3 Acreage fixed gets you 1 Canopy share. The big outlay has already been done and the deal is inked to happen when we get a "triggering event" which could be decriminalization at the Federal level, a whole new pro-marijuana deal or, some think, SAFE banking would be enough to keep the Feds at bay. That Federal marijuana legislation has teeth that non US companies aren't willing to test. It could result in seizure of investment, other assets, criminal charges, jail or all of these things.
Or Canopy and other non-US companies could just change their perception and rely on the same hand-shake deal that the US MSOs are relying on to let the pro-pot States administer their own justice and penalties which would only apply to serious trafficking outside the guidelines, similar, I imagine, to the Fed laws.
Small good intentioned potpreneurs would be ok to do business.
Canopy has that re-visited deal with Acreage to sew up control of Acreage and all of its multi-state assets with 70% of Acreage fixed shares which leaves 30% of those shares free trading under the Acreage symbol unless Canopy swallows them up at $6 US per share or a renegotiated price, commensurate with the times and values.
I don't believe that Canopy would walk from this deal as they already ponied up $30 plus million and to complete the takeover is just a matter of some printed share certificates.
Some have mentioned dilution of Canopy shares but my gut tells me that a "triggering event" will launch the US greenrush with at least 10x the bang that happened for Canada, way back when Canopy was worth $78 per share. I can imagine it easily getting back to that with the US getting on board to build out this new vice with the same panache that they bring to all of their businesses.
Some law and policy makers are just fearful of what will happen when they do swing the doors open, hopefully with the same set of rules for all States and they need to deal with the Interstate commerce such that California pot and hemp products can be sold in New York or any other State for that matter.
Right now those floating Acreage shares have a deal inked where they priced it at $6 per share and those shares were trading at $1.20 last Friday.
Also $3 worth of Acreage fixed shares would get you 1 share of Canopy worth $4.09 today.
Of course Canopy could just walk from the deal and their investment and go another route but I expect that would require more outlay of money, which they already did and Acreage has most of what they need for US flag planting.
Constellation could eat their $5 billion investment and dump the shares of Canopy but that isn't where they see this going. They invested in Canopy to be a part of this new vice to cover their anticipated losses for their old soft alcohol marketshare that they see going to cannabinoid infused beverages.
There is presently no need for any moves more than they have made and positioned for and Constellation has plenty of brain power to drive this forward to their advantage. If Canopy could count the US MSOs revenues in their balance sheet it would put Canopy as profitable.
In the meantime they are getting rid of the deadweight, buying up desirable assets, doing branding deals with legal US potpreneurs to get a toehold for some great brands already developed, tested and sold in Canada and other countries.
I believe that this whole segment is knee-jerking from fear that this will continue to drag out and US politicos will continue to use it as a political plum.
It would be great to get the full launch potential but barring that, the pot industry Stateside will get there one State at a time and there may be a possibility that Canopy can provide individual States under some Free Trade agreement with Canadian made product, which they ship to several other countries already.
Glad to see some investors acknowledging real goings on with Canopy, Acreage and Constellation plus some awareness of other companies that they have a hook into with loan guarantees or share ownership.
TER, GAGE, WANA, Martha Stewart, TWEED, Quatro, DEEP Space, BioSteel, all great brands that will be welcomed by consumers.
Keep in mind that Constellation's focus is beverages and the deals they have worked with Canopy and others will probably result in beverage skus which I think are going to continue to increase sales as they become available.
glta and dyodd
Contrar
Why would acreage renegotiate? They could a way better deal from Trul. Acreage would be trading 5-8x higher with this anchor/ Cgc
yp01048 wrote: Can anyone who has more knowledge of the STZ deal explain why they cannot just buy then out at these prices? What is stopping them?
Could they renegotiate the deal the same way CGC did with acreage?
Anyone?
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