Alcoholic beverages producer Constellation Brands has increased its stake in the Canadian cannabis company Canopy Growth.

The deal was executed by Constellation’s wholly-owned subsidiary Greenstar Canada Investment by exercising warrants for shares worth around C$245m ($173m), originally issued in November 2017.

Constellation Brands president and CEO Bill Newlands said: “While global legalisation of cannabis is still in its infancy, we continue to believe the long-term opportunity in this evolving market is substantial.

“Canopy is best positioned to win in the emerging cannabis space and we are confident in the strategic direction of the company under David Klein and his team.”

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This deal gives Constellation Brands an additional 5.1% stake in the Canadian company, increasing its total stake in the company to 38.6%.

Additionally, Constellation Brands noted that if warrants and senior notes were changed and exercised, then it would increase its stake in the cannabis company to nearly 55.8%.

Canopy Growth CEO David Klein said: “This additional investment validates the work our team has done since attracting the initial investment in 2017.

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“It also strengthens our ability to pursue the immense market and product opportunities available to Canopy in Canada, the US and other key global markets.”

In November 2018, Constellation Brands completed the C$5bn ($4bn) investment in Canadian cannabis company Canopy Growth.

The deal was approved by Canopy Growth shareholders and also received regulatory approvals from the Canadian government under the Investment Canada Act.

Canopy Growth intended to use the investment to expand its presence in more than 30 countries, currently pursuing federally permissible medical cannabis programmes.