Constellation Brands wagered heavily on the craft beer industry. The transnational beverage corporation paid $1 billion for Ballast Point Brewery back in 2015. It was a benchmark moment (along with Lagunitas Brewing Co.’s two-part sale to Heineken) for the crazy amount large alcohol makers were willing to spend on the high-speed train that was once the craft beer industry. Well, Constellation Brands is betting even bigger money on the weed industry.
The Victor, N.Y.-based booze rollup owns more than 100 brands, selling spirits (like Black Velvet and SVEDKA Vodka), wine (such as Ravens Wood and Wild Irish Rose) and extremely popular Crown Imports brands like Corona, Modelo and Pacífico in the United States (AB InBev owns them everywhere else). Besides Ballast Point, Constellation purchased Oakland Park, Fla.-based Funky Buddha Brewery last August, and just last month the company bought Four Corner Brewing Co. out of Dallas.
Yesterday, the company announced a significant expansion of its strategic partnership with Canopy Growth, a Canadian-based leader in cannabis production. Constellation Brands plans to increase its ownership interest in Canopy Growth, acquiring 104.5 million shares directly, achieving approximately 38 percent ownership. Constellation initially had a 9.9 percent stake in Canopy Growth. To the press release!
“Through this investment, we are selecting Canopy Growth as our exclusive global cannabis partner,” said Rob Sands, Chief Executive Officer, Constellation Brands. “Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy’s market-leading capabilities in this space. We look forward to supporting Canopy as they extend their recognized global leadership position in the medical and recreational cannabis space.”
The $4 billion USD is apparently the largest investment to date in the cannabis space. Constellation hopes to provide enough funds for Canopy Growth to strategically build, acquire key assets and deploy its business on a global scale in some 30 countries pursuing both a) a federally permissible medical cannabis program, and b) a foundation that’s needed for new recreational cannabis markets around the globe.
Canopy Growth’s future plans will include pursuing various product formats in lots of different cannabis channels, including pot drinks.
A day earlier, Constellation Brands announced its Ballast Point Brewing Co. brand has plans to open a tasting room, kitchen and R&D brewery in San Francisco’s Mission Bay neighborhood in early 2019. That’s all on top of its acquisition of Four Corners Brewing Co. in July (mentioned above). NOW a report coming out via Beer Street Journal says the company may also be laying off some of its “craft team.” From the website:
According to a source close to the situation, employees thought it was a routine phone call. Ultimately, the company that has purchased Funky Buddha, Ballast Point, and most recently Texas-based Four Corners, eliminated almost their entire sale representatives covering craft brands.
Beer Street Journal is told that the layoffs might include as many as 60 people. (That number has not been confirmed by Constellation.) Per individuals on the layoff call, the Corona Modelo “Import Team” will take responsibility for the craft brands going forward.