Beer and Bud: Corona Invests in the Marijuana Business
Constellation Brands have made headlines after they became the first beer, wine, and spirits company to invest in the marijuana business.
Known for brewing the oh so famous Mexican brand beer, Corona, Constellation just invested a whopping $191 million in the Canadian-based cannabis company, Canopy Growth Corporation.
The company made history and headlines by being the first company to make what some would call a risky move. Although legalization is gaining speed in the U.S., it still remains illegal on a federal level.
Constellation's Chief Executive, Rob Sands told the Wall Street Journal that it was a calculated move and that now the company has a leg up on its competition.
"We're obviously trying to get first-mover advantage," he said.
He also added that he thinks it's only a matter of time before cannabis is legalized on a federal level.
That's what we're hoping, Rob.
He might not be wrong, either.
A Gallup poll released last week showed 64% of Americans support weed legalization.
The marijuana business up north is approaching a boom. Canada is set to legalize recreational cannabis by July 2018. This should be followed by edibles and cannabis-infused beverages the next year, an area Constellation is sure to profit from.
So what does this mean for the U.S.? Well, Constellation doesn't anticipate selling its products in the States until cannabis is legalized on a federal level. That's not to say they won't be using Canada as a test drive.
If the company plans to sell cannabis-infused, non-alcoholic beverages in Canada alone, it could be tapping into a market worth around $5-$10 billion.
The move is especially smart when considering the impact cannabis legalization could have on the alcohol industry. Competition between the two is expected to be high, but why compete when you can profit from both?
Good move, Constellation, we see you.
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