Constellation Brands Inc., which for seven decades has made its money off beer, wine and whiskey, sees its future in a marijuana leaf. The owner of Corona, Kim Crawford Wines, and Ballast Point is to increase its stake in Canadian cannabis company Canopy Growth, investing US$4 billion to acquire a 38% share of the business. The drinks giant said that the deal would position Canopy Growth as “the global leader in cannabis production, branding, intellectual property and retailing”.
“This is rocket fuel,” Canopy Chief Executive Officer Bruce Linton said on the company’s earnings call Wednesday. “We’re going to be way more global.”
The new deal, which it claims is “the largest to date in the cannabis space,” cements Canopy Growth as its exclusive global cannabis partner. Constellation said that the funds will enable Canopy Growth to “build and/or acquire key assets” in around 30 countries that are legally developing medical cannabis programmes. If granted approval, the deal is expected to be completed in October 2018.
Rob Sands, chief executive officer, Constellation Brands, said: “Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy’s market-leading capabilities in this space. We look forward to supporting Canopy as they extend their recognized global leadership position in the medical and recreational cannabis space.”
Earlier this month, beer giant Molson Coors partnered with Canadian cannabis producer The Hydropothecary Corporation, to launch a standalone startup business to develop “non-alcoholic, cannabis-infused beverages for the Canadian market following legalization”. Among those planning to launch cannabis-related drinks products include Heineken-owned US craft brewer Lagunitas with its “IPA-inspired, THC-infused sparkling water,” a cannabis-infused Sauvignon Blanc from California’s Rebel Coast Winery and Blue Moon creator Keith Villa’s new business dedicated to producing cannabis-infused craft beer.