Alcohol Company in a New "Joint" Venture

Constellation Brands is in the booze business. They own about 30 wine brands including Mondavi, Ravenswood, and Mark West. They also own Corona Beer, Svedka Vodka, plus other beer and spirits companies. They are publicly traded and their stock hasn't been doing great and recently was downgraded to a "sell."

A few months ago they took a brave (desperate?) step and invested in Canopy Growth Corp. of Canada. This is a marijuana grower in a country where cannabis is now legal. Unlike the U.S. where many states have legalized to a certain degree the feds still consider it illegal so for any American company to invest locally would be a major risk.

Constellation has just upped their investment to a 38% stake. That $4 billion is the largest investment in the cannabis business ever. Constellation's CEO has declared Canopy Growth as their exclusive cannabis grower company.

Even though the market doesn't like the move in the short term it seems to make a lot of sense long term. Marijuana sales, even though illegal or very restricted, are nearly a $50 billion annual business in the U.S. Alcohol, btw, is a $225 billion business. It's a largely untapped market. When marijuana growing and sales become legal in the U.S. Constellation should be ready for the explosive growth. Of course, will this happen in five years? Fifty years?

There's gold in that green

As an aside, American wineries don't get involved in fear of losing their licensing for alcohol with the feds.

I'd like to see a copy of Constellation Brands' mission statement. Is there something like, "We're in the buzz business--any way you like it" or simply "We're here to make people feel good."