Constellation Brands, the alcohol company that makes Corona beer, Svedka vodka, and Robert Mandavi wine, has invested $4 billion in Canopy Growth (NYSE:CGC), a Canadian cannabis producer, in what is the "biggest known deal in the marijuana industry". Ten months earlier, Constellation took a 10 percent stake in Canopy to help create nonalcoholic cannabis-infused drinks and other products. The company now has a 38 percent stake and has the right to increase that to 50 percent.
If Constellation decides to take a majority stake in Canopy Growth, will Canopy Growth be listed under the parent company Constellation? (i.e. will CGC be delisted and relisted under the Constellation company ticker (NYSE: STZ)? Have any of you guys invested in Constellation Brands or Canopy Growth?
Legal cannabis is among the biggest possible risks to the alcohol business, according to Molson Coors.
So far Heineken and Molson Coors have moved to sell cannabis-infused drinks. Heineken's Lagunitas brand has started selling nonalcoholic sparkling water featuring THC, the active component of marijuana. And Molson Coors has formed a joint venture with Hydropothecary, a weed producer, to make cannabis-infused beverages.
Constellation has had slowing growth in its alcohol business and thus diversified with possibly one of the biggest up and coming markets, the marijuana industry, which is expected to more than triple in size from 2015-2020:
The research firm Euromonitor estimates that the American market for legal marijuana products will reach $20 billion by 2020, up from $5.4 billion in 2015.
- Michael J. de la Merced, N.Y. Times