By Tomi Kilgore – marketwatch.com
The U.S.-listed shares of Canada-based Canopy Growth Corp. CGC, -3.71% WEED, -3.60% shot up 28% in premarket trade Wednesday, after liquor seller Constellation Brands Inc. STZ, -2.78% said it will invest CAD $5 billion, or the equivalent of about $4 billion, in the diversified cannabis company as part of an expansion of the companies’ strategic partnership. Constellation Brand’s stock was still inactive ahead of the open. As part of the deal, Constellation Brands will increase its stake in Canopy by buying 104.5 million shares at C$48.60 a share, which is a 51.2% premium to Tuesday’s closing price of C$32.15, to achieve 38% ownership. Constellation will also receive warrants that if exercised would provide Canopy with an additional C$4.5 billion. Constellation will nominate four directors to Canopy’s board. Canopy shares have gained 4.1% year to date through Tuesday, while Constellation’s stock has lost 3.0% and the S&P 500 SPX, +0.79% has tacked on 6.2%.