*By Carlo Versano and Jacqueline Corba* Constellation Brands, the alcoholic beverage giant, is making a big bet that marijuana will be legalized in the United States ー and wants pot as the "fourth leg" of its beer, wine, and spirits "stool." The company, which makes Corona beer and Svedka Vodka, invested $4 billion in Canadian cannabis supplier Canopy Brands ー the largest weed deal by a major public company. Constellation's CEO Rob Sands said the investment is not a hedge, but rather a stake in what he believes is a "tremendous growth market." "We don't really see any evidence that cannabis has hurt the beverage alcohol business at all," he said Wednesday in an interview on Cheddar. Sands added that marijuana is complimentary to the alcohol business, not competitive. The investment also gives Constellation access to the medical marijuana market, the company's first foray into healthcare. Sands said medical marijuana will help the company test and standardize processes before scaling for a larger recreational market, with sights set on the potential U.S. market. Constellation had previously taken a nearly 10 percent stake in Canopy. Though the obvious synergy for Canopy and Constellation would be cannabis-infused beverages, Sands was quick to say he was thinking bigger: "Every form and every channel" of marijuana consumption is on the table. The deal sent shares of Canopy skyrocketing Wednesday, closing up 30 percent. Still, not everyone is convinced these large plays are wise. Altitude Investment Management Partner John Brecker said a day before the deal was made public that some of the larger cannabis companies are overvalued, and [his fund] (https://altitudein.com/portfolio/) is betting on smaller players such as Grassroots, Privateer Holdings, and flowhub. "Capital markets have opened up, and money is just rushing into cannabis," Brecker said Tuesday on Cheddar's CannaBiz show. "If you think first-in is a win, yes, Canada is the first in. But we're in the early innings of the cannabis industry." Canada will allow recreational marijuana as of Oct. 17, making the country the largest industrialized nation to legalize weed. But with legalization comes a new set of growing pains for companies like Canopy, according to investors like Brecker and the audit firm PwC. "The market now sits on the edge of a seismic shift that has already enticed investors to pour billions of dollars into cannabis companies," [PwC warned] (https://www.pwc.com/ca/en/industries/cannabis/pwc-cannabis-series-chapter-1-the-cannabis-landscape.html) in a recent report. "The risk here is that too many Canadian LPs (licensed producers) are trying to become global corporations before they have established sustainable domestic businesses." Cannabis companies are building tremendous production facilities in Canada, but there's not enough demand, said Brecker. "Ultimately for Canada to be successful they are going to have to build out a big export industry, that will take time." For more on this story, [click here](https://cheddar.com/videos/why-constellation-brands-is-betting-big-on-marijuana).
