Corona beer owner set to buy into world's largest cannabis grower

Corona beer owner set to buy into world's largest cannabis grower
PHOTO: Reuters

US drinks company Constellation Brands has agreed to buy a near 10 per cent stake in Canopy Growth Corporation, the world's largest publicly traded cannabis company.

Constellation, a beer distributor that owns Corona, is reportedly planning to work with the grower to develop, market and sell cannabis-infused beverages.

The agreement, confirmed in a press release Monday, is $245 million Canadian dollars (S$259.6 million) in exchange for a 9.9 per cent stake in the Canopy Growth Corporation.

It is seen by Constellation Brands President and CEO, Rob Sands, as an anticipation of a nationwide legalization of marijuana in the United States.

"We think that it's highly likely, given what's happened at the state level," said Sands in an interview with the Wall Street Journal.

In 2018, California is set to legalize the cultivation and selling of recreational marijuana, but Sands said his company didn't plan to sell the product in the US until marijuana was legal nationwide.

He added that Constellation would look to starting selling in countries where recreational marijuana is legal and Canada could be an option if, as scheduled, legislation there is relaxed next year.

Constellation Brands is a listed on the S&P 500 and posted record net sales of $7.3 billion for its fiscal 2017 results.

Canopy Growth is the world's largest publicly traded cannabis company, with a market valuation of 2.2 billion Canadian dollars. It is listed on the Toronto Stock Exchange.

Constellation said the transaction is expected to close during the Company's third quarter of fiscal 2018.

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