Get ready, green rushers — the alcohol industry is coming.
According the Wall Street Journal, a blockbuster purchase in Canada’s cannabis industry has made global alcohol behemoth Constellation Brands Inc. the largest shareholder in Canopy Growth Corp., the Great White North’s largest publicly traded medical marijuana company.
Constellation, the U.S. distributor of Corona and Modelo beer as well as Svedka vodka, paid $191 million for a 9.9% share in Canopy Growth, a move that industry experts predict will flip a proverbial switch, prompting other beer, wine and spirit bigwigs to try their hand in the burgeoning world of drinkable weed.
“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,” said Constellation Brands CEO Rob Sands 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.”
For the first two decades or so of America’s still-new experiment with legal weed, the alcohol industry has mostly shied away from reefer, with small-batch craft beer/cannabis collaborators, Nor Cal weed-infused wine makers, and dorm room scientists whipping up “green dragon” representing the two intoxicants’ principal intersections. Even in Nevada, where legal marijuana legislation explicitly made alcohol distributors the only permitted cannabis wholesalers for the industry’s first year, Silver State booze peddlers were initially uninterested in the ganja game.
But as the entire country of Canada prepares to end marijuana prohibition at once next year, with the U.S. hopefully only years (and not decades) from following suit, Constellation believes the time has finally come to start thinking about sippable sativas on a larger scale.
Representatives from the global beverage conglomerate have explicitly said that they will not be releasing any commercial cannabis products in the U.S. until federal prohibition is repealed, but with Prime Minister Justin Trudeau and his administration expected to open a countrywide marijuana market in Canada next year, cannabis fans from Toronto to Vancouver could be buying non-alcoholic Modelo Verde before the end of the decade.
Because edible and drinkable marijuana is already more potent than the smokeable stuff, Constellation says they currently have no plans to create a drink combining THC and alcohol.
“This looks a lot like the new normal,” Bruce Linton, Canopy’s CEO, told Bloomberg News. “There’s no need to include alcohol, nor is there an intent to include alcohol in how we follow through with things.”
Since legal marijuana began making its way into North America’s mainstream, market analysts have worried about the potential for the plant to cut into the alcohol industry’s profits. To combat that potential takeover, financial experts now predict that more traditional industry heavyweights will take Constellation’s lead in accepting the age-old idiom; if you can’t beat ‘em, join ‘em.
“We see this transaction as a game-changer for Canopy, as well as the industry at large,” said Vahan Ajamian, an analyst at Beacon Securities, to Bloomberg. “We suspect more alcohol companies may look to accelerate plans to enter the industry - as well as pharmaceutical and tobacco companies.”
Follow Zach Harris on Twitter
