The beer Corona owner Constellation Brands is set to pour $4 billion (£3.15 billion) of Canada as the top producer of cannabis, the Canopy of the Growth, in a deal marking the largest investment in the industry to this day.
Last year, the Constellation injected 200 million dollars in the Canopy in an agreement to produce a non-alcoholic cannabis drinks.
The alcohol is meant to capitalize on the growth of the legalization of the drug.
The news of the deal, the Canopy Toronto-listed shares has increased by 30%, while on Wall Street, Constellation has decreased by 6%.
The two companies said the investment would allow the Canopy to develop his company to reach “in nearly 30 countries in pursuit of a federal government eligible medical cannabis program.”
The canopy, which has the largest legal cannabis production footprint in the world, currently produces cannabis-based oils and soft gel caps, among other products.
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With the Constellation of the last injection of liquidity, the Canopy of plans to expand its product range to include products, bars, inhalers and pre-rolled items.
It also wants to develop cannabinoid-based drugs which offer a safer alternative to some of the major treatments for pain, anxiety, insomnia, and psoriasis.
“[This case] marks the end of the warm-up in our area… it’s completely go time,” said Canopy ceo Bruce Linton on an investment call. “Huge growth opportunity’
Constellation, which manufactures and sells beer, wine and spirits in the united states, Canada, Mexico, New Zealand, and Italy, noted that governments across the world had already marked a significant change in attitudes towards cannabis and cannabis-based products.
“Over the past year, we have learned to better understand the cannabis market, the tremendous opportunity for growth it presents, and the Canopy, the leader of the market of the capacity of that space,” said Rob Sands, ceo of Constellation Brands.
In June, the Canadian government has adopted a bill that will legalize the recreational cannabis market in the country. The bill is set to be rolled out in October.
Constellation of the last investment into the Canopy takes its stake in the company to 38%.
The transaction is subject to regulatory approvals and is expected to be closed at the earliest at the end of the month of October.