Brewers of Corona Beer Invest $3.8 Billion USD In Canadian Cannabis Growing Company Canopy Growth Corp

Constellation Brands Inc, the company behind Corona beer have invested $5 billion ($3.8 billion) to increase its stake in the Canadian cannabis grower to 38 percent.

“We believe this sizable investment clearly confirms Constellation’s commitment to growing out a global cannabis platform with Canopy,” Canaccord analyst Neil Maruoka wrote in a note Wednesday.

It's thought to be the largest investment in the cannabis industry to date.

The investment is positioned to grow a global cannabis empire with Canopy Growth Corp. and rocket the Canadian pot grower to a leading position on the world’s weed stage, according to analysts.

The transaction is expected to finalise in October 2018 -- the same month Canada is slated to legalize recreational cannabis

Constellation took on a minority stake in the pot company in October, paying about $245 million for an almost 10 percent stake. While it initially appeared to be a strategy to fend off cannabis-cannibalizing alcohol sales, Constellation has shifted to seeking a leading position in the weed game, according to Maruoka. As part of the agreement, Constellation will also receive 139.7 million warrants that can be exercised over the next three years, increasing its stake to more than 50 percent.

“With a potential controlling stake in the works, Constellation is committed to providing a substantial amount of capital to increase Canopy’s already leading position in Canada, and now potentially the world stage,” Maruoka wrote. The deal provides Smiths Falls, Ontario-based Canopy with capital that is “second to none in the industry” that could propel the company into as many as 30 countries worldwide, he added, from 11 now.

Canada will be the first G-7 country to allow recreational use of marijuana. In the U.S., only seven states permit recreational pot sales and the drug is still illegal at the federal level.

Many countries around the world are seemingly realising the potential cannabis could have on their country and economy.

Although it's still far from being fully legalized, the UK government announced recently that cannabis for medicinal purposes will be available on prescription in exceptional circumstances.