ACRGF - Ex-BC Premier Joins Constellation Brands Board Praises Canopy
Former British Columbia Premier Christy Clark said Canopy Growth (NYSE:CGC,TSX:WEED) is in the “best position of all the companies in the space” to develop in a highly regulated cannabis sector.
Constellation Brands (NYSE:STZ), one of Canopy Growth’s biggest partners, confirmed Clark’s appointment to its board of directors in September, alongside Jose Manuel Madero, citing Clark’s “extensive knowledge” of Canada’s regulatory and political environment as benefits.
Clark sat as the provincial premier from 2011 to 2017 after working as both the minister of education and minister of children and family development in BC.
In an interview with BNN Bloomberg on Friday (October 4), the former politician spoke about her excitement at joining the ranks at Constellation, a company she said is skilled at delivering on products in highly regulated industries.
Clark noted the fledgeling regulatory environment of the marijuana market wouldn’t be well served by having a lot of smaller companies selling cannabis within it, but Canopy Growth and Constellation Brands have the capability to make the safe creation and distribution of cannabis products possible.
“There aren’t really any other companies in the cannabis space at the moment that have this level of capacity,” she said.
The former BC premier isn’t the only player in the cannabis space with a political past. Former Canadian Prime Minister Brian Mulroney and former Speaker of the House John Boehner both backed cannabis company Acreage Holdings (CSE:ACRG.U,OTCQX:ACRGF), another firm with a Canopy Growth deal.
Clark added there is “huge potential on the (intellectual property) side” when it comes to the nascent industry, and that further research on the medicinal applications of marijuana was going to be the biggest driver of growth. It is a space, she said, Constellation Brands would dominate.
The American beer maker pumped C$5 billion into Canopy last year to assist in branding, intellectual property and retailing for the cannabis company.
Clark’s addition to Constellation Brands’ roster was another big management move for the company after former Canopy CEO Bruce Linton was pushed out of his role as chief executive.
With the investment, a conditional board reconfigurement was set and that same board, largely composed of Constellation executives, terminated Linton after being unimpressed by some less-than-stellar quarterly results.
Shares of Constellation Brands took a hit last week after it released it quarterly results for Q2 2020 on Thursday (October 3). The company reported a loss of US$484.4 million from its stake in Canopy Growth.
Constellation also reported a US$757 million unrealized net gain in reported basis results since its initial C$245 million investment into Canopy in 2017. A US$839 million decrease in the fair value of its investment into Canopy was also recognized during the latest quarter for the alcohol-maker.
Shares of Constellation dropped after the earnings report was released last week, falling 8.2 percent from a high of US$208.14 on Wednesday (October 2) to a low of US$191.02 on Thursday.
Constellation closed the trading day on Monday (October 7) at US$188.74.
Canopy Growth shares fared a bit better last week with a bit of fluctuation in New York from a high on Wednesday of US$22.58 to a low of US$21.52 on Thursday, a 4.7 percent decrease in value. Canopy was at US$22.23 at market close on Monday.
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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Acreage Holdings is a client of the Investing News Network. This article is not paid-for content.