Constellation Brands, a maker of beer, wine and spirits, has signed an agreement to acquire a 9.9 percent stake in Canopy Growth Corporation, the largest publicly traded marijuana company in the world.
Canopy, which was founded in Canada in 2014 and has a market cap of nearly $2 billion, is currently traded on the Toronto Stock Exchange under the “WEED” ticker symbol.
Constellation is the number three beer company in the U.S. with brands including Corona, and is also the world’s largest seller of premium wines and a manufacturer of premium tequila, vodka and whiskey brands. Constellation plans to work with Canopy to create, market and sell non-alcoholic beverages such as coffees and sodas that contain cannabis.
Rob Sands, president and CEO of Constellation Brands, said the company made the move in anticipation of marijuana becoming legal across the U.S.
“We think that it’s highly likely, given what’s happened at the state level,” Mr. Sands, told The Wall Street Journal. “We’re obviously trying to get first-mover advantage.”
Canada may become the first market for Constellation to introduce its pot-infused beverages with cannabis products expected to be legalized by 2019. The company has said it will not enter the U.S. market until marijuana achieves federal legal status. Cannabis, which is currently legal for recreational purposes in eight states and Washington, D.C., is illegal on a federal basis.
A recent Gallup survey found that support for marijuana continues to grow. Sixty-four percent of Americans are now in favor of legalizing the drug. For the first time since Gallup began polling Americans on the topic in 1969, a majority of Republicans (51 percent) support making marijuana legal. Seventy-two percent of Democrats and 67 percent of independents also favor legal cannabis.
While Constellation is the first, it is unlikely to be the last alcoholic beverage company to get into the legal pot business. The Journal reports that Heineken USA CEO Ronald den Elzen told attendees of a beer wholesalers conference, “Wine and spirits are not sitting still, and marijuana is being legalized in many states. We have to act now, and we have to do it together.”
Beacon Securities analyst Vahan Ajamian, according to Bloomberg, also thinks pharmaceutical and tobacco companies may have plans to enter the legal marijuana business, as well.
- Constellation Brands to Acquire Minority Stake in Canopy Growth Corporation – Constellation Brands
- Big Brewer Makes a Play for Marijuana Beverages – The Wall Street Journal
- Corona beer owner set to buy into world’s largest cannabis grower – CNBC
- Record-High Support for Legalizing Marijuana Use in U.S. – Gallup
- Alcohol Industry Targets Pot With Constellation-Canopy Deal – Bloomberg