Shares of the Ontario-based cannabis producer Canopy Growth Corp. jumped nearly 30 percent on Aug. 15, after beer giant Constellation Brands announced it will invest another $4 billion in the Canadian company.<\/p>\n
Constellation last year\u00a0paid $190 million for a 10 percent stake<\/a>\u00a0in Canopy Growth, with an eye toward the development of a cannabis-infused beer. This new investment will increase Constellation\u2019s stake in the company up to about 38 percent.<\/p>\n \u201cOver the past year, we\u2019ve come to better understand the cannabis market, the tremendous growth opportunity it presents and Canopy\u2019s market-leading capabilities in this space,\u201d Constellation CEO Rob Sands said in a\u00a0statement<\/a>. \u201cWe look forward to supporting Canopy as they extend their recognized global leadership position in the medical and recreational cannabis space.\u201d<\/p>\n Constellation Brands<\/a>, based in upstate New York,\u00a0is the stateside brewer of\u00a0Corona\u00a0beer and distributor of\u00a0Robert Mondavi\u00a0wine. In Mexico, where the brand originates, Corona is brewed by Grupo Modelo. Constellation also markets Modelo and\u00a0Pacifico beer in the United States, as well as Sweden\u2019s\u00a0Svedka vodka.<\/p>\n The 30 percent\u00a0jump was the biggest one-day gain Canopy has seen since it\u00a0began trading on the New York Stock Exchange<\/a>\u00a0in May of this year.\u00a0Canopy Growth<\/a>, with a massive grow operation in Smith Falls, Ont., is\u00a0North America\u2019s top producer of legal cannabis<\/a>.<\/p>\n Constellation\u2019s move is most the dramatic evidence yet of the\u00a0emerging synergy<\/a>\u00a0between the cannabis and alcohol industries. Speaking to\u00a0Market Watch<\/a>,\u00a0Wells Fargo<\/a>\u00a0analyst Bonnie Herzog called the news \u201cvery positive\u201d for the company, as it \u201cfurther solidifies Constellation Brands\u2019 first-mover advantage as many of the major brewers are now pursuing cannabis as a potential growth driver.\u201d<\/p>\n However, she acknowledged that \u201cthere could be some cannibalization risk for Constellation Brands\u2019 beer\/alcohol portfolio.\u201d<\/p>\n Investopedia<\/a>\u00a0defines market cannibalization as a situation in which a new product introduced by a company \u201ceats\u201d up the demand for the current product, potentially reducing overall sales. This points to the long cultural divide between booze and pot as stimulants of choice \u2014 although there is\u00a0clearly also broad overlap<\/a>.<\/p>\n Nonetheless, Herzog was generally bullish on the move, even conjecturing that Constellation may eventually buy all of Canopy. She noted that the brewer has already\u00a0reported a gain of more than $700 million<\/a>\u00a0on its initial investment.<\/p>\n The move also marks the entry of the United States\u2019 big banking interests in the cannabis industry, as Constellation\u00a0received financing<\/a>\u00a0for the deal from\u00a0Bank of America<\/a>\u00a0and\u00a0Goldman Sachs<\/a>.<\/p>\n Canada is preparing for full legalization of cannabis this year following Parliament\u2019s\u00a0approval of the Canadian Cannabis Act<\/a>\u00a0in June. Prime Minister Justin Trudeau has said the country will legalize by Oct. 17.<\/p>\n More sobering news was provided by\u00a0CNBC<\/a>, which noted that Constellation\u2019s own stock plummeted 6 percent upon the announcement of the deal \u2014 its worst daily performance since January 2017. And trade website\u00a0Brewbound<\/a>\u00a0reports that news of the deal came just as Constellation laid off dozens of employees tasked with marketing the company\u2019s craft and specialty beers throughout the United States.<\/p>\n \u201cPot is certainly the next frontier for growth, but it\u2019s also fraught with risk,\u201d Boris Schlossberg, managing director of\u00a0forex trading strategy<\/a>\u00a0at\u00a0BK Asset Management<\/a>, told CNBC.<\/p>\n \u201cI view it almost like coffee. It\u2019s a plant-based product that is very ripe for price competition,\u201d Schlossberg added. \u201cBasically, anyone can produce it. Could they be undercut through prices by somebody else once pot goes essentially global in the marketplace?\u201d<\/p>\n TELL US<\/strong>, do you have any cannabis stocks?<\/p>\n The post Canopy Growth\u2019s Stocks Soar as Beer Giant Invests $4 Billion<\/a> appeared first on Cannabis Now<\/a>.<\/p>\n
Shares of the Ontario-based cannabis producer Canopy Growth Corp. jumped nearly 30 percent on Aug. 15, after beer giant Constellation Brands announced it will invest another $4 billion in the Canadian company. Constellation last year\u00a0paid $190 million for a 10 percent stake\u00a0in Canopy Growth, with an eye toward the developmentContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":190,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4589,50,2487,2177,170,4231,4050,5451],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/28630"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/190"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=28630"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/28630\/revisions"}],"predecessor-version":[{"id":28631,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/28630\/revisions\/28631"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=28630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=28630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=28630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Cannabis and Cannibalization<\/h4>\n
\u2028On the Sober Side\u2026<\/h4>\n
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\nRead More: Canopy Growth\u2019s Stocks Soar as Beer Giant Invests Billion<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"