Constellation Invests in Cannabis Industry
Constellation Brands, importer of Corona and owner of Ballast Point Brewing has dived into the cannabis industry by buying a 9.9% stake in Canopy Growth Corporation. Canopy Growth is a major publicly traded cannabis company based in Canada.
Constellation has said it plans to work with Canopy to develop, market and sell cannabis-infused beverages. Legislation is pending in Canada to legalize cannabis, with edible and beverage products expected to be legalized by 2019. The company has also said that they expect nationwide legalization of marijuana in the United States.
The deal is expected to close next month and the purchase price was reported as being about $191 million.
This could very well be just the beginning of Big Beer getting into the cannabis industry. Legalization of cannabis is expected in most states in the U.S. within the next 10 years as well as in many countries. The cannabis trade has many similarities to alcohol, including packaging, distribution and regulatory structure. As millennials shift their drinking habits away from mainstream beer and over to craft beer, wine and spirits, Big Alcohol companies may be looking for new frontiers.
