Constellation Brands will invest around $4 billion of capital in Canopy Growth, Bottomley said in the note. (See the analyst's track record here.)
The cannabis company plans to issue 140 million warrants that could result in further investment over the next three years that increases Constellation's stake to more than 50 percent, the analyst said.
Bottomley sees the investment as a "transformational event" for Canopy that allows the company to expand its platform. Canopy now has a dominant cash position in the Canadian cannabis industry, the analyst said.
"The company is substantially better suited to execute on a global first mover advantage with the capital and strategic leverage provided by Constellation."
Canopy Growth was trading up 0.23 percent to $30.95 off the open Friday.
BofA Trims Constellation's Price Target, Sees Similar Investments From Beverage Companies On The Horizon
As Millennials Pivot From Booze To Buds, The Beer Industry Strikes Cannabis Partnerships
Latest Ratings for CGC
|Aug 2018||Canaccord Genuity||Upgrades||Hold||Speculative Buy|
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