Constellation Brands will pay CAD 245 million ($191 million) for a 9.9% stake in Canopy Growth Corporation, a Canadian supplier of medicinal marijuana, paving the way for it to launch a series of cannabis-infused alcoholic drinks.
Constellation, the owner of vodka brands like Svedka and the importer of US beers like Corona and Modelo, said the deal falls in line with its “long-term strategy to identify, meet and stay ahead of evolving consumer trends and market dynamics”.
It emphasised that it would not develop cannabis products for markets where the drug is not currently legal, like the US.
But medical marijuana is permitted in Canada, helping to foster innovation and create a niche industry in recent years, while plans are afoot to legalise the possession of small amounts of cannabis for personal use – a pledge included in the election manifesto of Canadian prime minister Justin Trudeau.
Founded in 2014, Canopy Growth is one of the earliest commercial players in Canada’s legal cannabis market. The company owns a collection of brands such as Tweed, Spectrum Cannabis and Bedrocan, serving customers in Canada and international markets where medicinal cannabis products are legal.
Constellation Brands CEO Rob Sands said: “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.
“Our company’s success is the result of our focus on identifying early stage consumer trends, and this is another step in that direction.”
Canopy Growth CEO Bruce Linton added: “We are thrilled to have the backing of such a well-established and respected organisation such as Constellation Brands.
“We look forward to working with the Constellation Brands team to access their deep knowledge and experience in growing brands as we continue to expand our business.”
Constellation Brands is an international producer and marketer of beer, wine and spirits with operations in the US, Mexico, New Zealand, Italy and Canada. It has more than 100 brands in its portfolio and employs 9,000 people.
The transaction, which gives Constellation Brands the option to purchase an additional ownership interest in the future, is expected to close during the third quarter 2018.
© FoodBev Media Ltd 2017