Constellation Brands Inc., which for seven decades has made its money off beer, wine and whiskey, sees its future in a marijuana leaf, reports Bloomberg.

In the biggest (legal) cannabis deal, the Victor, New York-based beverage company will spend about $3.8 billion to boost its stake in Canadian grower Canopy Growth Corp., betting legalization will gain traction around the world and especially in the U.S.

Constellation, among whose brands are Corona and Ballast Point beers and Robert Mondavi wine, will own 38 percent of Canopy, up from about 10 percent, according to a statement Wednesday. The record investment reflects a world in which pot has become ubiquitous as its counterculture stigma fades. In the U.S., a patchwork of state laws and gentle enforcement under the Obama administration have made its pungent odor common from Colorado ski towns to the sidewalks of New York.

On Oct. 17, Canada will become the first G-7 country to legalize pot for recreational use. In the U.S., federal law still prohibits the drug, but states from California to Colorado have made it legal, and its medical use is thriving. The situation has created legal dissonance, but also the expectation that America will one day support a vibrant consumer market.

After Wednesday’s deal, Canopy’s Canadian shares jumped as much as 52 percent to the highest since the stock began trading in 2010. Constellation fell as much as 9.2 percent, the most intraday since November 2016.

Global consumer spending on cannabis will hit $32 billion by 2022, triple current levels, according to a report this week by U.S. research firms Arcview Market Research and BDS Analytics. The U.S. industry is gaining economic and political clout, employing more than 200,000 workers.

Still, the companies face a formidable obstacle in the Trump administration. Attorney General Jeff Sessions over a decades-long career in law enforcement has made prosecuting marijuana crimes a focus. “Good people don’t smoke marijuana,” he said in 2016.

Still, President Donald Trump appeared to get out of states’ way when he signaled he’d allow them to decide how to regulate the drug, against his attorney general’s policy.

Canopy, which has a presence in 11 markets around the world, said it would make international growth a priority. The company isn’t putting hard guidelines on how it plans to use the influx of capital, though its target acquisition list exceeds $1 billion globally, Linton said on the call.

In addition to Canada, marijuana is partially legalized in the United States, the Netherlands, the Czech Republic, Switzerland, Estonia, Belgium, Portugal, Spain, Germany and a number of Latin American countries, but not as a drug that can be produced industrially for recreational purposes.

 

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