Alcohol giant Constellation Brands is making a foray into marijuana, a precedent-setting move for an industry that has mostly stayed on the sidelines during the cannabis boom.
Constellation will pay about $191 million (C$245 million) for a 9.9 percent stake in Canopy Growth Corp., a Canadian seller of medicinal-marijuana products. The deal kicked off the biggest rally in nearly a year for Canopy, which trades on the Toronto Stock Exchange under the ticker WEED.
The legalization of marijuana in Canada and a growing number of U.S. states is opening up a huge potential market — just as demand for alcohol is slowing. Still, pot remains prohibited at the U.S. federal level, meaning American companies have to tread carefully.
Constellation, based in Victor, N.Y., said it has no plans to sell cannabis in the U.S. or other markets until it’s legal “at all government levels.” For now, it’s more a matter of identifying markets