Looking for buds? U.S. marketer of Corona is diving deep into the marijuana business. The Mexican beer is renowned for its "Find Your Beach" tagline, it’s Constellation Brands, which also markets wine and spirits brands, has taken a 9.9% stake in a Canadian marijuana company called Canopy Growth Corp.
The marketer has agreed to take a 9.9 percent stake in Canopy Growth, a Canadian marijuana company, and it plans to work with the grower to develop and market cannabis-infused beverages.
The market valuation of Canopy Growth stands at $C2.2 billion ($2.2bn) on the Toronto Stock Exchange, this comes from the fact that it’s the world’s largest publicly traded cannabis company. Constellation will have a strong hold on the industry that the brewer expects to be soon legalized in the U.S.
“We think that it’s highly likely, given what’s happened at the state level,” Rob Sands, chief executive of the Victor, New York-based beer, wine, and spirits company, said in an interview. “We’re obviously trying to get first-mover advantage.”
Constellation posted a 13 percent increase in beer sales in its latest quarter and it’s still interested in developing drinkable cannabis products that don’t contain alcohol. The products that are currently in the market include buzz-inducing sodas, fruit elixirs, and coffees.
According to Independent research firm Euromonitor International, the legal marijuana market in 2018 will be $US7.5bn ($9.8bn) in Canada and $US10.2bn in the US.
There has been an ongoing debate amongst US beer-industry executives as to whether legalized marijuana could cannibalize sales of beer, even as other consumers migrate from beer to wine and spirits. Some brewers have experimented with cannabis-infused beers, not containing THC but instead a marijuana flavor.
“Wine and spirits are not sitting still, and marijuana is being legalized in many states,” Heineken USA chief executive Ronald den Elzen said at a beer wholesalers conference earlier this month. “We have to act now, and we have to do it together.”
Mr. Sands made a statement saying that he doesn’t see pot as a threat to booze. However, if a consumer is going to choose a can of beer, a glass of wine, a shot of liquor or a weed-laced elixir, he wants to be able to offer all four.