As legal Marijuana use continues to gain social acceptance, one big beverage company is showing its support of cannabis by investing some money in it – a lot of money. Constellation Brands, the conglomerate behind beer products Corona and Modelo, just bought a huge stake in a cannabis company.

First ever deal between beer and weed

Based in Canada, Canopy Growth Corp. received $191 million from Constellation in exchange for 10 percent of the company. This large investment marks the first time a major alcohol producer has decided to take a risk on legal marijuana.

The company is likely banking on a huge return on investment once recreational weed becomes legal in Canada next year. In addition, this investment potentially puts Constellation in a “first-mover advantage” position over competitors in the U.S. with marijuana already legal in over half the states and a growing push that will eventually sanction the drug at the federal level.

Budding legal issues in the US

While Constellation executives clearly see a business opportunity in legalized marijuana, they are not ready to sell any cannabis products in the U.S.

The company will wait until weed is permitted at the federal level to avoid any potential legal problems. While the timeline for Constellation Brand products to hit the U.S. market will remain uncertain for quite a while, residents in Canada won’t have to wait nearly as long.

Drinkable weed in Canada’s future

The Canadian government is on track to legalize recreational marijuana as early as July 2018, with cannabis-infused edibles permitted shortly thereafter.

Constellation, partnered with Canopy Growth, will likely introduce a non-alcoholic, drinkable weed beverage to the marketplace sometime early 2019. Market watchers project the Canadian marijuana industry will ultimately be worth nearly $10 billion, and Constellation expects to get a fair share.

A deal with high hopes for growth in marijuana industry

As part of the partnership deal, Constellation, a Fortune 500 company, has the option to buy more shares of Canopy in the future. With annual beer sales continuing a downward slide, Constellation now has the opportunity to enter the marijuana industry, with a market poised for significant growth as legalization continues to gain momentum. Started in 2014, Canopy has since become one of the largest medical cannabis producers on the planet. In addition to Corona and Modelo, Constellation controls multiple alcohol brands, including Svedka vodka and Black Box wine.
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