Marijuana: Hesitant Molson Coors and brazen Constellation Brands
Is this the future? Constellation Brands, which sells Corona Extra beer in the US, is attempting to create cannabis-infused drinks, after the number three brewer in the US on 30 October 2017 reported it had acquired a 9.9 percent stake in the Canadian medical marijuana company Canopy Growth.
This move took many by surprise. The stake is worth about USD 191 million and Constellation will have the option of purchasing additional shares in the future. Founded in 2014, Canopy Growth is traded on the Toronto stock exchange and owns several brands.
Constellation, which is valued at USD 42 billion (compared with Heineken’s USD 57 billion), can certainly afford to splash out on speculative investments. It recently bought the craft brewer Funky Buddha in Florida. It also owns the craft brewer Ballast Point from San Diego.
For the time being Constellation has no intention of selling cannabis products in the United States. It will wait until it is legal nationwide. But the company must be betting that legalisation is just a matter of time.
In the meantime, Constellation will take the opportunity to play around with marijuana drink products in Canada, where the legalisation of edible and drinkable cannabis products is expected by 2019.
The move comes amid signs that suggest some consumers are reducing alcohol usage in favour of cannabis and Constellation may seek to be ahead of the curve.
Though based in Colorado, which was among the first US states to legalize recreational weed, the number two brewer in the US, Molson Coors, appears to be more cautious than Constellation, but it is also looking into possible expansion into the marijuana industry.
On 1 November 2017, Mark Hunter, CEO of Molson Coors, told analysts: “Obviously, being based here in Colorado, we are very familiar with cannabis, as it’s been legalized here. And clearly this is something that, as the whole legal landscape continues to change, we’re actively working to understand.” Nonetheless, he was not giving away any specific pot plans.
“I think the important thing is to make sure we don’t get caught in some kind of adrenaline rush. We are very thoughtful, very purposed and we are very clear on how we want to respond to both what could be challenges and what also could be opportunities. So, more to come in due course,” he said.
