What does a beer company do to hedge against slowing growth in its main business? In the case of the parent company of Corona, the answer is to invest heavily in the marijuana industry.
Constellation Brands, which also makes Robert Mondavi wine and Svedka vodka, announced on Wednesday that it had invested $4 billion in Canopy Growth, a publicly traded Canadian cannabis producer. The deal comes nearly 10 months after Constellation first took a 10 percent stake in Canopy to help create nonalcoholic cannabis-infused drinks and other products.
Constellation’s investment in Canopy, the biggest known deal in the marijuana industry, shows just how far traditional alcoholic beverage companies are willing to go to find growth. As sales of beer fall in the United States, brewers have begun to bet that legalization of marijuana around the globe, especially the United States, will continue to build momentum and sales of cannabis products will take off.