Constellation Brands, a massive alcohol beverage company, is investing $5 billion into Smiths Falls, Ont.-based cannabis company Canopy Growth.
According to a press release, Constellation Brands is increasing its ownership of Canopy Growth, the world's largest publicly traded cannabis company, to 38 per cent by acquiring 104.5 million shares.
"Through this investment, we are selecting Canopy Growth as our exclusive global cannabis partner," said Rob Sands, CEO of Constellation Brands, in the press release. "Over the past year, we've come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy's market-leading capabilities in this space."
Sands added that his company will be helping Canopy Growth extend its global reach in the medical and recreational cannabis markets.
Constellation Brands is based in Victor, New York, and is a leading producer of beer, wine and sprits around the world. It owns well-known beverages such as Corona beer and Kim Crawford wines.
Eyeing international, local growth
Canopy Growth is looking at the international market, but also looking at the retail cannabis market at home.
The Ontario government recently announced a big change in the province's plans for pot sales — allowing private retailers to sell cannabis in stores, and taking on online sales only.
Private retail stores are something Canopy has been lobbying for, with the goal of opening a store at its factory in Smiths Falls.
While it hasn't been selected as a retailer of cannabis yet, the company's CEO Bruce Linton is more than hopeful. He said Canopy has already received licences to operate stores in Newfoundland, Manitoba and Saskatchewan and is close to sealing a deal with Alberta.
"We've been selected in four other provinces," Linton told CBC News. "I think hope is a good strategy, but we've been competent as well."
The company recently bought up a retail outlet called Hiku, which was set up as coffee shops around Ontario that could be turned into cannabis stores if the province went in the direction of private sales. Canopy will be applying for the maximum number of retail locations a company can have, Linton added.
"It was really a bet that having good retail locations would be a good play in the province," he said.