Constellation Brands, the alcohol goliath that two years ago acquired craft beer darling Ballast Point Brewing Co., is putting its money toward another emerging sector — cannabis-based beverages.
The Victor, N.Y.-based Constellation plans to spend C$ 245 million ($ 190.88 million U.S.) to acquire a 9.9 percent stake in Canopy Growth Corp., a Goliath in the emerging Canadian and international cannabis markets, the companies announced Monday. Canopy produces and sells marijuana through its brands such as Tweed.
The Wall Street Journal first reported about the investment on Sunday.
Constellation will provide support in areas such as consumer analytics, marketing and brand development, Canopy officials said Monday, adding that the companies will collaborate to develop cannabis-based beverages marketed to adults in markets where the substance is federally legal.
Constellation has had its eye on the cannabis industry for at least a year now.
Following the 2016 Election, in which eight states legalized either the medical or recreational use of marijuana, Constellation CEO Rob Sands told Bloomberg news that his firm was dipping its toes into the marijuana market.
“There are going to be alcoholic beverages that will also contain cannabis,” he said at the time.
Canopy, ultimately, will be the vehicle for that goal.
Constellation officials trumpeted the firm’s potential in a potentially explosive new industry.
“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,” Sands said 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, which recorded $ 7.3 billion in revenue during its past fiscal year, has a portfolio of liquor and beer brands that include as Corona, Mark West, Ballast Point and Svedka.
This story is developing and will be updated.