Sometimes it is necessary to read between the lines. So, when the largest cannabis company in the world enters into a multi-billion dollar deal with a well-known American cannabis firm — one that is set to take effect only after the federal government repeals marijuana prohibition — it is hard not to consider the possibility that someone knows something and that maybe, just maybe we are closer than we think to living in a time when marijuana is taxed and regulated nationwide in a manner similar to alcohol and tobacco.
It was just last week that Canopy Growth signed a $3.4 billion agreement to acquire the medical marijuana firm Acreage Holdings. You might remember Acreage for its failed attempt at getting a cannabis advertisement approved as part of the sporting circus known as Super Bowl LIII. The basis of the agreement is that as soon as the U.S. government finally musters up the guts to end marijuana prohibition once and for all, Canopy will — snap, bang, boom, just like that — assume the Acreage properties and hit the ground running as the most powerful cannabis seller in the United States.
Although the deal is still contingent on several details – like stockholder agreement and regulatory approval by both the U.S. and Canada – neither company seems concerned that their mingling will be contested.
“Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible pathway exists,” Bruce Linton, co-CEO for Canopy, said in a press release. “By combining Acreage’s management team, licenses and assets with Canopy Growth’s intellectual property and brands, there will be tremendous value creation for both companies’ shareholders.”
There are a few rather interesting aspects of this arrangement. The first of which is the fact that Constellation Brands, maker of the beers Corona and Modelo, owns 37 percent equity stake in Canopy, and has an opportunity to take controlling interest in the next few years. So it is conceivable that, regardless of how much the cannabis industry fights to become its own entity with its own set of unique rules, one of the largest brewers in the world is also poised to become the most significant cannabis producer in the United States. Considering that Constellation is already working with Canopy to devise THC-beverages for the Canadian market, all of which is being done in experimental preparation for when the United States goes fully legal, it is difficult to see the point where they might opt out. Indeed, Big Alcohol is becoming Big Cannabis.
Source: Forbes.com
