(Reuters) - Corona beer maker Constellation Brands (STZ.N) will infuse another $4 billion into Canada’s top cannabis producer Canopy Growth (WEED.TO), the biggest investment in the industry, to capitalize on booming demand for marijuana.
Constellation, among the first big alcohol makers to invest in the marijuana industry, pumped almost $200 million in Canopy last year in a deal to produce a non-alcoholic cannabis-based beverage.
With the new investment it will support Canopy’s full suite of products and assist as it develops new offerings, Constellation Chief Executive Rob Sands said on a conference call.
Toronto-listed Canopy shares rose as much as 35 percent and were up 28 percent at C$41.17 at 10:18 am ET (1418 GMT), the highest level since June, and lifted shares of its peers. Constellation shares slid 8 percent to $203.73 in New York.
Canopy said it will use the proceeds to expand and gain exposure to the nearly 30 countries likely to approve medical marijuana. It is targeting C$1 billion in overseas acquisitions over the next six to 12 months, Canopy Chief Executive Bruce Linton said on the call.
“This (deal) marks the end of the warm-up in our sector ... It’s fully go-time,” Linton said.
Canada, where 4.4 million people reported using marijuana in the first half of the year, approved medical marijuana in 2001 and will fully legalize the recreational use of cannabis in October.
As some countries start opening up to legalizing medicinal marijuana, Constellation peers Molson Coors (TAP.N) and Anheuser-Busch (ABI.BR) have also pursued cannabis deals. Molson Coors said this month its Canadian arm would make cannabis-infused drinks with Hydropothecary Corp (HEXO.TO).
With its new deal, Constellation is paying a 38
