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Fitch chops Canopy rating, citing cannabis producer’s Constellation link

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Canopy Growth’s planned entry into the U.S. marijuana market has hit another hurdle – this time over the cannabis producer’s ties to its largest investor.

Fitch Ratings downgraded its credit assessment of the Ontario, Canada-based Canopy to CCC-, one of its lowest ratings.

CCC carries “substantial credit risk” such that default is a real possibility.

It’s the second time in six months that Canopy’s credit rating has come under scrutiny from Fitch.

The New York-based ratings company said it believes the strategic link between Canopy’s biggest investor, alcohol giant Constellation Brands (CBI), and the licensed cannabis producer “has materially diminished” after Canopy announced its plan to speed its entry into the U.S. THC market.

“As such, Canopy’s ratings no longer benefit from a one-notch uplift from its standalone credit profile,” Fitch said.

In a statement to MJBizDaily, a Canopy spokesperson said Constellation Brands remains vested in Canopy’s success as a major shareholder “and fully supports this strategy as the best way to position Canopy for near- and long-term success.”

The spokesperson added that Canopy is making the move to take its destiny into its own hands by fast-tracking its entry into the U.S. marijuana market and taking full ownership of its investments there.

Constellation executives touched on their commitment to Canopy and the cannabis industry in a conference call with analysts on Oct. 6.

After being asked how long Constellation is willing to “wait” for U.S. legalization and how he views the alcohol company’s stake in the cannabis producer changing, Constellation CEO William Newlands said, “I wouldn’t expect you to see the size of our investment in that change.”

Newlands admitted he “failed miserably” in predicting the pace of U.S. legalization but also said he’s “hopeful” there will soon be progress.

In its latest update, Fitch said it downgraded the long-term issuer default ratings for Canopy Growth from CCC to CCC-.

Fitch also lowered the credit rating of the senior secured term loan facility from B/RR1 to B-/RR1.

Fitch’s action comes less than a week after Canopy announced a plan to speed its entry into the American market.

Rather than waiting for the United States to legalize at the federal level, Canopy launched Canopy USA, which would purchase the three American marijuana businesses Canopy had agreed to buy after the U.S. ended prohibition, pending various approvals.

Canopy’s proposal calls for Canopy USA, not Canopy Growth, to own the assets, and the Canadian business would hold nonvoting, exchangeable shares in Canopy USA.

“Fitch believes the transaction, as proposed, is subject to material execution risks including regulatory, shareholder and exchange approval,” the credit ratings agency said.

Stock exchange risk

Fitch isn’t the first to raise concerns about the deal.

The New York-based Nasdaq stock exchange objects to Canopy’s plan to eventually consolidate the financial results of Canopy USA.

By contrast, the Toronto Stock Exchange (TSX) suggested that the proposed structure is compatible with the exchange’s rules.

Neither the TSX nor the Nasdaq would answer specific MJBizDaily questions.

“Canopy’s credit agreement contains affirmative covenants to comply with all policies and listing requirements of public securities exchanges,” the Fitch notice acknowledged, adding: “A failure to remain listed on at least one exchange would be a condition for an event of default.”

Fitch noted that Canopy USA would need to maintain funding separate from its parent company.

“Fitch will continue to review Canopy’s corporate structure and exposure to U.S. THC assets that are federally illegal and whether that increases rating concerns,” the ratings company said.

Fitch also noted “significant execution risks” in Canopy’s premiumization strategy and an uncertain path to profitability, highlighting significant lost market share in Canada.

“This has delayed production of a consistent, higher-quality supply at commercial scale and generated weak operating results with an uncertain path to profitability,” according to the Fitch note.

“Canopy hopes to counter these issues with a change in its genetics and cultivation strategy to higher quality cannabis with the right attributes … for the premium and mainstream flower, pre-rolls, edible and vape markets, while using the value segment as an outlet strategy.”

On that point, Constellation’s executives said during the analyst conference call they continue to believe that Canopy’s focus on “premiumizing” its cannabis branded portfolio in Canada “is appropriate,” and they remain supportive of Canopy’s efforts to strengthen their emerging consumer packaged goods brand distribution.

Fitch said further negative rating actions could be taken if the company’s “premiumization” cultivation strategy fails, or if it pursues a repayment of the remaining 2023 notes that Fitch considers a distressed debt exchange, if liquidity appears constrained, such that a default is probable.

Canopy shares trade as WEED on the Toronto Stock Exchange and as CGC on the Nasdaq.

Source: https://mjbizdaily.com/fitch-chops-canopy-rating-citing-cannabis-producers-constellation-link/

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Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light

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Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).

The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.

India’s Indigenous LEO Satellite Vision

Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.

The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.

According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.

The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.

Regulatory Process Moves Forward

Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.

The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.

Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.

Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.

Broadband, Mobile Connectivity, and Strategic Applications

Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.

The company also intends to establish 20 to 22 ground stations across India to support network operations.

Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.

Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.

Major Step for India’s Space and Telecom Sectors

Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.

The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.

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Alleged Crores Pharma Scam Mastermind Arrested from Surat

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After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.

Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.

Fake Business Deals and Dishonoured Cheques Used in Fraud

Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.

In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”

Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.

Multiple Identities and Repeated Fraud Pattern

Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.

Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.

Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.

Multi-State Surveillance Leads to Arrest in Surat

A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.

Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.

Growing Threat of Corporate Identity Fraud

The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.

Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.

Experts Urge Stronger Due Diligence in High-Value Transactions

Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.

Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.

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EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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