2018-08-16 at 12:11 PM UTC
Bloomberg (edited for length)
Corona beer giant puts $3.8 billion bet on US love of cannabis
Kristine Owram, Jen Skerritt and Craig Giammona
Constellation Brands Inc., which for seven decades has made its money off beer, wine and whiskey, sees its future in a marijuana leaf.
In the biggest (legal) cannabis deal, the Victor, New York-based beverage company will spend about $3.8 billion to boost its stake in Canadian grower Canopy Growth Corp., betting legalization will gain traction around the world and especially in the U.S.
“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.”
Constellation, among whose brands are Corona and Ballast Point beers and Robert Mondavi wine, will own 38 percent of Canopy, up from about 10 percent, according to a statement Wednesday. The record investment reflects a world in which pot has become ubiquitous as its counterculture stigma fades. In the U.S., a patchwork of state laws and gentle enforcement under the Obama administration have made its pungent odor common from Colorado ski towns to the sidewalks of New York.
Now, makers of alcoholic beverages are trying to add cannabis as an edgy ingredient as their traditional business slows. Molson Coors Brewing Co. has started a joint venture with Hydropothecary Corp. to develop non-alcoholic, cannabis-infused beverages for the Canadian market. Heineken NV’s Lagunitas craft-brewing label has launched a brand specializing in non-alcoholic drinks infused with THC, marijuana’s active ingredient.
After Wednesday’s deal, Canopy’s Canadian shares jumped as much as 52 percent to the highest since the stock began trading in 2010. Constellation fell as much as 9.2 percent, the most intraday since November 2016.
On Oct. 17, Canada will become the first G-7 country to legalize pot for recreational use.
Global consumer spending on cannabis will hit $32 billion by 2022, triple current levels, according to a report this week by U.S. research firms Arcview Market Research and BDS Analytics. The U.S. industry is gaining economic and political clout, employing more than 200,000 workers.
Canopy, based in Smiths Falls, Ontario, has specialized in the medical product and doesn’t currently have operations south of the border. Entering the U.S. may create challenges for its listing on the Toronto Stock Exchange, as the bourse has said it may delist marijuana companies that run afoul of U.S. federal law. Canopy is also listed on the New York Stock Exchange.
Both companies said they have no plans to sell cannabis products anywhere unless it is permitted at all government levels.
2018-08-16 at 1:46 PM UTC
-SpectraL
coward
[the spuriously bluish-lilac bushman]
It may be legal in Canada next month, but penalties for enforcement of conditions will bring hefty mandatory jail sentences, along with staggering fines. For example, if you provide marijuana to a person under the legal age, you will be looking at years in jail.
2018-08-16 at 1:57 PM UTC
^^^^^^^^^^^^^^^
Buys beer for teenagers.
2018-08-16 at 2:08 PM UTC
Cootehill
African Astronaut
[my unsymmetrically blurry oregano]
How long before hippies are complaining about "Big Pot"?
