On Monday, Constellation Brands (NYSE: STZ) announced plans to take a 9.9% stake in Canopy Growth, a $2 billion Canadian medical marijuana company. Constellation Brands is the maker behind Corona, Svedka, and Modelo worth about $42 billion. This deal will total to $191 million as the two companies join forces to create cannabis infused drinks.
Constellation is aiming to sell marijuana drink products in Canada where legalization of edible and drinkable cannabis goods is expected by 2019. However, the sale of cannabis products in the U.S. won’t be available until its legal nationwide. This plan is a move followed by consumers’ moving shift towards cannabis usage rather than alcohol intake. Surveys have shown that about 80% of consumers reduce their alcohol consumption with cannabis in the mix.
“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.”