Constellation Brands which owns Corona beer invested $4 Billion dollars into one of the top cannabis producers in Canada.
Canopy Growth first received $200 million from Corona in 2017 giving Constellation Brands a 10% stake in the company. With the latest investment, Constellation now owns 38% of the company and there is talk of an additional investment that would bring it’s stake up to 50% for a majority control.
The investments from Constellation will be used to expand Canopy into 30 countries where medical cannabis is likely to be approved.
Following the announcement of Constellation’s investment, Canopy stock rose nearly 30%. Constellation’s stock, fell nearly 6%.
Canada is set to legalize cannabis nationwide in October, though some think it may happen as soon as September. Constellation’s investment is thought to be tied to the optimism about legalization on a national stage.
The investment is significant considering one of cannabis’ biggest foes has been the alcohol industry who see cannabis as direct competition. It’s clear that Constellation thinks it’s better to ride the wave of widespread acceptance of cannabis use than to spend millions of dollars fighting it.
What this means for the alcohol industry remains to be seen. It’s likely that some companies will continue to invest in fighting legalization instead of getting on board with the tide of pro legalization flooding the nation.
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