Eyeing growth in the marijuana market, US alcohol distributor Constellation Brands announced it acquired a 9.9 percent stake in Canadian cannabis company Canopy Growth Corporation. Constellation, which markets Corona and Modelo beer among other brands, will pay Can$245 million ($190 million) for the stake and granted warrants for additional ownership down the road.
“This investment and relationship is consistent with Constellation Brands’ long-term strategy to identify, meet and stay ahead of evolving consumer trends and market dynamics, while maintaining focus on its core total beverage alcohol business,” Constellation said in a news release announcing the investment.
“Constellation has no plans to sell any cannabis products in the US or any other market unless or until it is legally permissible to do so at all government levels.” Canada is scheduled to legalize cannabis next July after having already permitted use of the product for medical use. Medical marijuana is permitted in 29 states in the US, but recreational marijuana use is legal in just a few.
“Canopy Growth has a seasoned leadership team that understands the legal, regulatory and economic landscape for an emerging market that is predicted to become a significant consumer category in the future,” said Constellation chief executive Rob Sands.
“Our company’s success is the result of our focus on identifying early stage consumer trends, and this is another step in that direction.” Founded in 2014, Canopy is one of the main players in Canadian cannabis. It reported revenues of Can$39.9 million for the fiscal year ending March 31.