Drinkable cannabis has been on the rise since the advent of states in America with recreational marijuana legalization and now that Canada is on the brink of implementing recreational legalization, a recently announced strategic relationship has the future of Canadian cannabis beverages looking bright.
On Oct. 30, 2017, Canopy Growth Corporation (TSX: WEED) announced a strategic relationship with Constellation Brands (NYSE: STZ and STZ.B), the United States distributor of Corona beer and other total beverage alcohol, with a Constellation affiliate investing approximately C$245 million in Canopy Growth for 9.9% equity in the company. As a part of the relationship, Constellation and Canopy Growth will work together in developing cannabis beverages for Canada’s recreational market.
“In Constellation we have a strategic ally that will join us as we lead the global cannabis sector into the future. We have also strengthened our balance sheet to fund the ambitious expansion efforts we have planned heading into 2018 – a year that will see unprecedented growth in medical and adult-use opportunities,” said Bruce Linton, Chairman and CEO of Canopy Growth, in a press release.
According to Rob Sands, President and Chief Executive Officer of Constellation Brands, “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.”
The Wall Street Journal broke the news of the Constellation and Canopy Growth relationship on Oct. 29. While Canopy Growth’s stock closed on Oct. 27 at $12.81, the big news boosted the stock 19% on Oct. 30, closing the day at $15.22. The news also sparked a Constellation stock increase of .52%, closing the day at $213.00.
Canopy Growth was today’s top gainer for the Canadian Marijuana Index, as well as the most active, with share volume logging in at 14.7 million.