The beer biz never sleeps at American Craft Beer. And here’s some more of what’s been happening in the beer world, while you were drinking yourself through another hot August weekend.
Constellation Brands Cuts Craft Beer Staff And Increases Their Stake In Canadian Cannabis Producer (Victor, NY) – For those concerned that legal marijuana might be usurping craft beer, last week’s announcement that Constellation Brands (home to Mexican beer leaders like Corona and crafty properties like Ballast Point, Funky Buddha and the recently acquired Four Corners) had upped its stake in Canadian cannabis producer, Canopy Growth and cut its craft beer sales team in the same week can’t help but resonate.
The massive $3.8 Billion deal announced Wednesday allows Constellation Brands to increase their ownership of the major pot producer significantly, up from 9% to 38%. Then Beer Street Journal reported that as many as 60 members of Constellation’s craft sales team dialed into what they believed to be a “routine conference call” on Wednesday afternoon, only to learn that they were being laid off.
Words To Drink By (Victor, NY) – “Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and we look forward to supporting Canopy as they extend their recognized global leadership position in the medical and recreational cannabis space.” – Rob Sands, Chief Executive Officer, Constellation Brands
But not everyone loved the Constellation/Canopy deal. On August 15th, the date of the announcement, shares of Constellation’s stock plummeted 6.1%, losing $13.54 per share. That’s a mind-boggling $2.6 billion in market cap hit in one day!
Under the new agreement Canopy will remain Canopy but Constellation Brands will pick up four board of directors seats. What’s more, as The Motley Fool explains, “Constellation will receive 139.7 million new warrants as part of the deal, which become exercisable over the next three years. Assuming Constellation exercises these options, even with the dilutive effect of adding new shares to the outstanding total, its ownership stake in Canopy could exceed 50%.”
MolsonCoors reported that its sales decreased for the fourth straight quarter on August 1st. They also used that Q2 address to announce that they’d entered into a joint venture with HEXO, (a recreational cannabis subsidiary to Canada’s The Hydropothecary) to form a standalone company to develop new non-alcoholic, cannabis-infused drinks north of the border.
And in July, Heineken introduced a cannabis-infused, non-alcoholic beverage known as Hi-Fi Hops through its wholly owned craft brewery, Lagunitas. Currently, the beverage is on sale at only a select number of locations in California.
Pot Beer Image Credit: Mitchell Maglio