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Corona Marketer to Enter the Pot Business

By Published on .

Find your buds? The U.S. marketer of Corona, the Mexican beer known for its "Find Your Beach" tagline, is dipping its toe into the marijuana business. Constellation Brands, which also markets wine and spirits brands, has taken a 9.9% stake in a Canadian marijuana company called Canopy Growth Corp., the Wall Street Journal reported Sunday.

A Constellation spokesman confirmed the deal, which is expected to be formally announced on Monday. According to the Journal, Constellation will work with Canopy to create and market cannabis-infused beverages. Constellation will not sell any such pot products in the U.S. unless marijuana is legalized nationally, but it is eyeing the Canadian market, the Journal reported.

Canada is expected to legalize recreational pot next year. In the U.S., recreational marijuana use is legal in eight states and Washington, D.C. A Gallup poll released last week showed 64% of Americans supporting pot legalization, the broadest support Gallup has found in nearly a half-century of polling. For the first time, a majority of Republicans, 51%, back legalization, according to Gallup. Republican Attorney General Jeff Sessions is considered to be hostile to legalization, but he "could find himself out of step with his own party if the current trends continue," Gallup noted.

Pot's rising popularity has sparked debate inside the brewing industry over just how much marijuana competes with beer. At a recent National Beer Wholesalers Association meeting, Heineken USA CEO Ronald den Elzen lumped pot in with other buzz-producing products that are stealing share from beer, while calling on brewers to work together to promote beer. "Wine and spirits are not sitting still and marijuana is being legalized in many states across the country," he said in a speech at the gathering in Las Vegas. "We have to act now and we have to do it together."

But evidence of pot's threat to beer is not conclusive. "I believe marijuana and beer fit into this gray area, of substitutes and complements," Michael Uhrich, economist of the Beer Institute trade group, said at a meeting earlier this year, according to an account by Beer Business Daily.

Constellation, whose other brands include Modelo beer, Svedka vodka and Kim Crawford wine, is not taking any chances. "We're obviously trying to get first-mover advantage," Constellation CEO Rob Sands told the Wall Street Journal.

Constellation foreshadowed its move late last year, when Sands confirmed the marketer's interest in cannabis-infused beverages in an interview with Bloomberg.

"People who are using cannabis may be disinclined to drink as much as they might have otherwise, but maybe they weren't going to drink in the first place and then they drink something," Mr. Sands said. "Maybe the whole thing will work out synergistically."

Ontario-based Canopy described itself as a diversified cannabis company with more than a half million square feet of indoor and greenhouse production capacity. Its brands include Tweed, which grows weed in a former Hershey chocolate factory in Smiths Falls, Ontario. Last year, Tweed struck a deal with rapper and noted pot supporter Snoop Dog, whose "Leafs By Snoop" brand is sold by Tweed in varieties including Moonbeam and Palm Tree.

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