It looks like Constellation Brands investing a whopping $4 billion into Canadian marijuana company Canopy Growth Corp. has set the gears into motion on Wall Street for other alcohol companies.
It’s been reported that the maker of Smirnoff and Guiness, Diageo, may be the next big alcohol company to invest in marijuana.
According to BNN Bloomberg, citing sources familiar with the situation, Diageo Plc is pursuing a deal with a Canadian cannabis firm and is holding serious discussions with at least three major producers.
Diageo has met with several Canadian companies over the last months over potentially striking a deal for an investment or collaboration to create new cannabis-infused beverages, said the sources.
An executive team from Diageo has also recently attended a Toronto marijuana conference and held several meetings with marijuana companies in the city to discuss possible partnerships or an equity arrangement.
A Diageo spokesperson declined to comment on the rumor, but did say that the company is “monitoring this space closely.”
The sources said that discussions between Diageo and the companies are still private.
Dan Mobley, Diageo’s corporate relations director, said the cannabis sector in North America was “still [in] very early days and that “we are monitoring very closely and seeing how the market is evolving.” He added, “Some [U.S.] states are more advanced than others, but the legal cannabis trade is taking share from the illegal trade.”
“Right now, they’re in the mix,” said one source involved in the discussions. “We have very close ties to the top of the [Diageo] decision-making tree.”
It’s been reported that Molson Coors Brewing is also in talks with marijuana companies.
It’s an exciting time for marijuana as Canada is expected to begin legal recreational marijuana sales on October 17th.
Canopy Growth shares have soared more than 500 percent over the last year. CEO of Canopy, Bruce Linton, said that Constellation Brands’ investment had been “rocket fuel” for the company.