Cannabis Drinks Get A $200 Million Investment
By Ryan Velez
A lot of the time, getting in on trends requires taking certain risks. If you’re looking to see where the next big trend in beverages may be, Celebrity Net Worth recommends that you follow market titan Constellation Brands. Constellation recently invested $200 million in the development and promotion of its cannabis-infused drinks.
Constellation Brands already has its reach in several different parts of the beverage industry. It owns Robert Mondavi wine, Svedka vodka, and in the United States controls the Corona beer brand, and recently acquired a 9.9 percent stake in a company that may go on to become just as well-known as any of those: Canopy Growth, purported to be "the world's largest publicly traded cannabis company."
Even for a company this size, there is an element of a gamble here. Constellation reportedly does not want to sell any cannabis-infused beverage products until marijuana is federally legalized. However, the CEO, Rob Sands, notes that such an outcome is "highly likely, given what's happened at the state level."
To put this in perspective, recreational use of cannabis (including putting it in drinks) is legal in eight states in the US, with medical use OKed in dozens more. Attorney General Jeff Sessions is staunchly anti-marijuana, posing a big roadblock to federal legalization. However, Sands thinks that the investment is worth the risk, considering his company’s move as an attempt to get "obviously trying to get first-mover advantage." He may be onto something, as even in its current state, the marijuana business made almost $6 billion in sales tallied for 2016.
This move may be rather timely, as there is a strong chance that there may be a big new market for cannabis opening up soon. Phil Murphy was elected as governor of New Jersey, and he has promised to make a big push for marijuana legalization upon taking office. In the past, the state almost made it legal, only to be vetoed by then-governor Chris Christie. Now, it looks like there are little roadblocks in the way to legalization for the Garden State. While this is a long way from the federal legalization that Constellation is reporting, it may be a major step, especially if neighboring states try following suit to get a piece of the pie.