Leading Cannabis Stock Companies Joining Forces To Build Weed Empire. Marijuana commerce may be this decade’s most interesting news. Already we have seen significant movement in the world of weed. Now, there are more big moves afoot in the world of corporate cannabis.
Constellation Brands Inc. has positioned itself to be a worldwide cannabis empire alongside Canopy Growth Corp. This will rocket the Canada-based pot grower to one of the leading positions atop the universal weed stage.
Leading Cannabis Stock Companies Building Weed Empire
Constellation is the beermaker of the Corona brand and is spending $5.8 billion Canadian (not quite $4 billion USD) to enhance its portion of Canopy Growth, which is a major Canadian cannabis enterprise, to 38 %. Constellation is touting the bold move as the marijuana world’s biggest investment yet.
We believe this sizable investment clearly confirms Constellation’s commitment to growing out a global cannabis platform with Canopy.
– Canaccord analyst Neil Maruoka
Constellation acquired a minority interest in Canopy last October, paying about $245 million Canadian for not quite 10% of the company.
Many analysts believed it was a strategy to balance out cannabis-cannibalizing liquor sales. As it turned out, Constellation wasn’t playing defense.
They had an offensive strategy in mind. They were throwing their weight behind a search for a lead position in weed.
As a part of this agreement, Constellation will receive 139.7 million warrants (stock options, in USA-speak) that they can exercise any time over the next 36 months. Those warrants would increase its stake in Canopy to in excess of 50 percent.
The deal provides Canopy, headquartered in Smiths Falls, Ontario with capital that could propel them into as many as thirty countries worldwide.
That would make these two combined by far the largest marijuana concern in North America, and one of the biggest worldwide. (Statistics from South America are hard to quantify accurately.)
Canopy Growth Stock
Canopy stock surged 50% to a record high on the Toronto exchange. Constellation, however, fell about 9% on the New York exchange.
That is its steepest drop in almost two years. Alcohol peer Diageo Plc also declined as a result of this recent development.
Most observers were bullish on the news. But, some analysts suggested potential investors should hold their horses when it comes to the latest news.
Looking forward, much work and change still needs to occur in order for this industry to realize its full potential.
– Cowen analyst Vivien Azer wrote in a separate note today.
Even as tens of millions of dollars of legalized pot in Canada looms on in two months, this big financial wager hinges on weed consumption gaining ground in both the U.S. and worldwide.
But, this is history without a doubt. The agricultural financial world will shift on its axis when legalization becomes a reality.
Recreational Marijuana Legal Nationwide In Canada
Canada became the first G-7 nation to allow the unhinged recreational use of marijuana. In this country, only seven states as yet permit recreational pot sales.
The drug remains outlawed in the United States at the federal level.
What will this do to the price and availability of weed in the United States? What, in particular, does it mean for states that border Canada?
Are a couple of Canadian acres planted with weed the route to getting rich?