Constellation Brands buys stake in cannabis company

Weed legalization plan

VICTOR, N.Y.  - Spirits maker Constellation Brands (STZ) is buying a minority stake in a Canadian medicinal marijuana producer, a sign the liquor industry is moving into the burgeoning cannabis sector.

Constellation, which sells Corona beer, Robert Mondavi wines and Casa Noble tequila, among other brands, will pay $190.5 million ($245 million Canadian dollars) for a 9.9 percent interest in Canopy Growth (WEED).

Constellation, based in Victor, New York, near Rochester, said Monday that it has no plans to sell marijuana in the U.S. or any other market until it's legal at all government levels. But in a statement, Constellation CEO Rob Sands noted that the cannabis business "is predicted to become a significant consumer category in the future."

"Our company's success is the result of our focus on identifying early-stage consumer trends, and this is another step in that direction," he added.

Shares of Canopy Growth jumped more than 17 percent in Toronto.

"In Constellation we have a strategic ally that will join us as we lead the global cannabis sector into the future," Canopy Growth CEO Bruce Linton said in a statement. "We have also strengthened our balance sheet to fund the ambitious expansion efforts we have planned heading into 2018, a year that will see unprecedented growth in medical and adult-use opportunities."

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In 2016, Constellation reportedly explored marketing alcoholic beverages that contain cannabis. That would require prior approval from the U.S. Treasury Department's Alcohol and Tobacco Tax and Trade Bureau, which some experts see as unlikely as long as cannabis remains illegal under federal law.

Eight states and Washington D.C. have legalized the use of recreational marijuana.