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Alcohol companies have often involve themselves in lobbying against cannabis legalization. Many of these companies no doubt worry that legal cannabis, medical or recreational, will eat into their profit margins. There is good reason for them to be concerned. After all, as we recently wrote, alcohol sales drop in states where medical cannabis is readily available.
However, not all businesses seek to simply undermine developing markets to protect their profit margins. Some of them see cannabis as a potential source of business growth and expansion. Constellation Brands, the maker of popular Corona beers, is one such company.
They recognize that cannabis is an up-and-coming market that will surely continue to flourish as more states legalize. Constellation Brands just spent $4 billion to increase their stake in Canopy Growth, a large and publicly traded cannabis company. That’s after they bought 10% of the company last year. Now, the company holds 38%, and they also ensured that they have the right to seek more.
If you aren’t familiar with Canopy Growth, they are actually one of the largest marijuana growing companies in the world at this time. As more states legalize and other countries move into legal cannabis, it is likely that they and similar companies will only increase their profits, making them popular targets for companies looking to diversify and profit from cannabis sales.
An investment like this from a major, established brand makes it clear that legal cannabis is a developing market that simply cannot be ignored. Whether or not this is simply a financial move or the first step in developing a cannabis-infused beer is anyone’s guess.
For many activists, the main concern with large companies like canopy growth are that they could push out smaller, niche producers. Hopefully, as with beers, the cannabis industry can continue to support micro-businesses and small, locally owned companies. Consumers just have to choose local growers and processors, much like they do when they visit local breweries instead of buying a Bud Light.
There is definitely the potential for both corporate entities and smaller, local businesses to both operate in the legal cannabis industry. It will be fascinating to watch how Corona’s interest in this company unfolds as legalization continues to spread. Activists should continue to push for legalization and pay close attention to creating laws that promote social justice and let smaller companies stay in the legal industry.
For previous Ladybud articles about legalization, click here.