In October of 2017, Constellation Brands, Inc. (STZ) made waves by acquiring a 9.9% stake worth about $191 million in Canopy Growth Corp. (CGC).
Constellation, based in the Rochester suburb of Victor, NY, owns about 100 different wine, beer and spirit brands, including Ballast Point, Black Velvet, Corona, Meiomi, Modelo, Pacifico, Robert Mondavi and Ruffino. Canopy, based in Ottawa, ON, is a medical-marijuana company. Constellation’s late-October purchase of a 9.9% stake led to a spike in Canopy’s stock price from $5.15 on Oct. 30 to $9.30 on Nov. 13.
Canopy’s stock continued to rise through the end of 2017, and its shares traded at more than $20 throughout the first half of 2018. Then, on Aug. 15, Constellation announced it was boosting its position in Canopy to 38% — an additional investment representing $3.8 billion.
Here’s video of Bloomberg reporting on the news:
Canopy CEO Bruce Linton called the investment “rocket fuel” for his company. But, more importantly for Canopy shareholders, Constellation’s new investment sent stock prices soaring — from $24.62 a share on Aug. 14 to $46.32 by close on Aug. 27.
While the news of Constellation’s increased stake may have surprised some analysts, an investor using JetTrack would have been able to see clear signs of activity between the two companies leading up to the additional investment.
Constellation’s Stream of Flights to Ottawa
JetTrack’s database includes six aircraft either leased or wholly owned by Constellation. Leading up to the company’s initial investment in Canopy, only once did a Constellation aircraft visit Ottawa — on May 5, 2017.
But something changed during the summer of 2018 — Constellation’s aircraft started flying to Ottawa with increasing frequency. Here’s a look at eight visits that took place before the deal closed in mid-August:
June 6, 2018: Rochester to Ottawa (stay of 6 hours)
June 25, 2018: Rochester to Ottawa (1 hour)
June 25, 2018: Rochester to Ottawa (less than 1 hour)
July 24, 2018: Undisclosed location to Ottawa (5 hours)
Aug. 8, 2018: Rochester to Ottawa (less than 1 hour)
Aug. 8, 2018: Chicago to Ottawa (less than 1 hour)
Aug. 10, 2018: Rochester to Ottawa (6 hours)
Aug. 13, 2018: Chicago to Ottawa (less than 1 hour)
Of course, that final flight from Chicago to Ottawa puts Constellation executives near Canopy headquarters just 48 hours before news of the increased stake broke.
JetTrack Helps Identify and Confirm Signals
Constellation’s initial investment in Canopy was a strong indication that the company might look to grow its presence in the cannabis industry at some point in the future. That said, there was little public news about activity between Constellation and Canopy during the months between Constellation taking a 9.9% stake in October 2017 and increasing that stake to 38% in August 2018.
An analyst using JetTrack would have been able to add Constellation to a “Watchlist,” making it easy to see increased visits to Ottawa. JetTrack is helpful in knowing where executives from specific companies are doing business, but perhaps the most valuable aspect of JetTrack is seeing how common or rare it is for a company’s executives to visit a certain destination.
Constellation’s sudden increase in visits to Ottawa throughout the summer of 2018 augured more activity — but only analysts using an advanced tool like JetTrack would have known about that sudden increase.
Interested in taking a closer look at JetTrack? Get in touch to learn more.