The drink giant behind Corona and Modelo is bullish about the future of the legal marijuana market.
“We have actually acknowledged the considerable chance that the emerging marijuana area provides as possibly among the most considerable international development chances of the next years,” Constellation Brands CEO Rob Sands informed financiers on Thursday.
Constellation, the third-largest beer business in the United States, paid $4 billion in August for a 38% stake of Canopy Development, the biggest openly traded cannabis grower, to establish marijuana-infused drinks and other items. It’s the biggest business financial investment in a cannabis farmer to date.
“We continue to be exceptionally bullish, if not more bullish, because we have actually revealed the offer,” Sands stated, including that Canopy is well-poised to take advantage of the Canadian market when legal cannabis enters into result on October17
Canada will end up being the very first G7 nation to legislate cannabis at the federal level.
“We’re feeling respectable about Canopy’s position,” Sands stated. According to Constellation, Canopy has actually protected 35% of the supply agreements for the Canadian market– which, according to the beermaker’s numbers– might end up being approximately a $7 billion market in Canada.
Sands likewise kept in mind Canopy’s “considerable positions” beyond Canada in nations like Germany and U.K. that are rapidly relocating to medical cannabis legalization.
In the United States, Sands stated: “Things are moving rapidly.”
“There’s definitely a great deal of talk that, ultimately, there’ll be some kind of decriminalization of cannabis at the federal level,” Sands stated.
Maybe remarkably, Sands countered information that revealed legalized cannabis might impact beer and alcohol sales.
“We see no proof whatsoever, particularly in the United States, in the legal states, of alcohol cannibalization,” Sands stated.
Sands stated Constellation didn’t purchase Canopy to support slumping beer sales.
“We’re not playing defense, we’re playing offense,” Sands stated. “The entire market is going to be explosive.”