Constellation Brands has announced that it will take a minority stake in Canadian medical marijuana company Canopy Growth.
Beer and marijuana are often paired together, and one company is poised to take advantage of both markets.
Constellation Brands, the maker of Corona, Modelo, and Svedka, just took over a minority stake in Canopy Growth, a Canadian medical marijuana producer. Constellation purchased 9.9 percent of Canopy, which cost them $191 million. Canopy is worth approximately $2 billion.
Constellation, in combination with Canopy’s experience with marijuana, plans on releasing a line of infused beverages.
“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 Brands CEO Rob Sands in a statement. “Our company’s success is the result of our focus on identifying early-stage consumer trends, and this is another step in that direction.”
Constellation and Canopy won’t be selling marijuana beverages in the United States just yet but plan to do so if and when the federal law changes. Constellation is planning on selling beverages in Canada as soon as next year when legal sales of marijuana are expected to begin.
Several studies have shown that marijuana legalization could be cutting into sales of beer and alcohol. It seems that Constellation is looking to get ahead of this trend.
There are already companies that are combining marijuana and beer. Lagunitas recently began distributing Super Critical IPA, a beverage that combines marijuana terpenes with beer. Super Critical IPA does not produce psychedelic effects and so far is available only in California. Dude’s Brew, based out of Colorado, also produces a similar beer that will not have its customers getting stoned.
The trend of companies from established industries looking to enter marijuana is expected to continue.
“We suspect more alcohol companies may look to accelerate plans to enter the industry — as well as pharmaceutical and tobacco companies,” Vahan Ajamian, a financial analyst at Beacon Securities said according to the Chicago Tribune.