An interesting week at Constellation as various industry sources reported the company has laid off 60 employees in their craft division while at the same time investing $4 billion (billion with a “B”) in the cannabis company Canopy Growth Corporation.
The massive investment will raise Constellation’s stock holding to 38% in the Canadian-based multi-layer cannabis company. Canopy produces and sell cannabis in a wide variety of products including dried, oil and capsule. They do business in 11 countries.
This may very well be just the beginning of a more widespread investment in the cannabis industry by alcohol industry players, bot small and large. As the beer industry continues to see declining market share, with mid-year shipments of domestically produced beer down 2.7%, the attraction to the fast-growing cannabis industry is a natural.
Heineken-owned Lagunitas Brewing has launched Hi-Fi Hops, a non-alcoholic beverage containing THC and CBD that are produced in partnership with CannaCraft. And Molson Coors Brewing partnered with HEXO, a cannabis company in Quebec. Smaller craft brewers have also put out beer brands with CBD, but the TTB has shut these down, at least temporarily.
Meanwhile, Constellation has laid off or moved to other positions about 60% of its 100 craft and specialty beer sales reps. While some brewers are adding sales reps to counter the hyper-competitive marketplace, others are shedding sales reps in an effort to cut costs and maintain margin. The layoffs at Constellation have not slowed their overall investment in craft however, as it also came to light this week that they will be opening a new Ballast Point brewpub in San Francisco. This will be the seventh Ballast Point on-premise location once it opens along with the recently announced location at Disney District at Disneyland Resort in downtown Anaheim.