Constellation Brands, the U.S. distributor of Corona beer and Svedka vodka, has agreed to take a 9.9 percent stake in Canopy Growth Corp., a Canadian medical cannabis company, for about US$191 million (C$245 million) the company announced in a press release. The announcement comes less than one year after Constellation CEO Rob Sands told Ad Age that the company was considering adding cannabis to their portfolio.
“Why wouldn’t big business, so to speak, be acutely interested in a category of that magnitude?” Sands said in the Nov. 2016 interview. “If there’s a lot of money involved, it’s not going to be left to small mom-and-pops.”
Canopy Growth is publicly traded on the Toronto Stock Exchange in Canada; while Constellation Brands is traded on the New York Stock Exchange in the U.S and has a market capitalization of about $41 billion.
“We’re obviously trying to get first-mover advantage,” Sands said in a Wall Street Journal report.
According to the statement released ahead of the today’s market opening, Constellation said the deal is “consistent” with its long-term strategy “to identify, meet and stay ahead of evolving consumer trends and market dynamics, while maintaining focus on its core total beverage alcohol business.”
“We are thrilled to have the backing of such a well-established and respected organization such as Constellation Brands,” said Bruce Linton, chairman and CEO of Canopy Growth Corporation, in a statement. “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.”
The transaction is expected to close during the third quarter of 2018.