My crystal ball is telling methat the cannabis market has been overdone, probably from the irrational exuberance that ran rampant with crazy multiples of sp to be made, mostly on hope because there weren't very good financials to back up those multiples.
Too many players have rushed in to both public companies and private while black market is still alive and well and some even making the move to legal.
Too many players at most levels and government's unwillingness to do what is necessary to lay the foundation for access by legal players to flourish because they are in competition with illegal cartel and black market weed.
Oversupply takes the profit out of the growing end and consumers are showing a willingness to change from smokeables to value added, nicer consumption methods like edibles and beverage options.
STZ aka Constellation Brands is beverage personified and they have jumped in with both feet to capitalize on the change they expect to their soft beverage alcohol kingdom.
They started with $5 billion Canadian to position themselves with Canopy Growth who are the world leading tail to snout marijuana and hemp company launched in Canada where it is legalized for pharma use and rec adult use. Canopy developed and formulated a multitude of cannabinoid infused beverages which I believe is what attracted STZ to them. Constellation made a very proactive move to be a part of the change they see coming and shocked the weed world with that kind of investment that helped to legitimize the future profit potential for new vice and pharma companies which created a greenrush in Canada and got the interest of US players too.
Canada legalized pot but dropped the ball with lots of delays and uncertainty that has crippled the potential for profit, at least until we get through the difficult period of attrition because of too much supply and too many players.
Constellation recognized that Canada doesn't deserve much more investment and instead started positioning themselves for doing business in the US. This has been announced by STZ/Canopy management, obviousley feeling that new legislation is imminent to create a better atmosphere for International cannabinoid companies to bring their wares and IP to US consumers.
Constellation is a mega unicorn business management company that makes money and pays dividends to their shareholders. They have quietly gone about laying the groundwork for being a formidable player on US soil with inventive, creative deals to be voters of influence in several US branded publicly traded companies and they learned from their original deal with Canopy, that some of those control deals can be revisited and re-valued and because they recognized that they had enough clout, they did this to position themselves better with the parent company STZ.
STZ/Canopy are formidable and have a big brother STZ that has deep pockets to pull together several marijuana and hemp companies to maintain their leadership designation and ride out the storm of attrition that is going to kill 95% of the marijuana hopefuls.
The US is dragging anchor on full cooperative legalization that will level the playing field for cannabinoid infused beverages with the well established beverage alcohol manufacturers but are touting the health advantages that cannabinoids bring to the consumer over alcohol style beverages.
Constellation is steering their marijuana and hemp division towards the US with options and branding deals to get their Canadian born skus in to the hands of US consumers without stirring up the protectionist faction of US business.
This is showing action to plug the cash drain that is happening in Canada and put Canopy into a market with more potential where some of the US MSOs are showing black ink by navigating within the guidelines to bring cannabinoids to consumers.
$5 billion investment by STZ to move towards a different future and I have also invested in some of their US investment deals because I like their vision and recognize their hardcore business approach to follow Canopy's concept of buying up what is going to give a return on investment and putting them under "the Canopy"!
STZ has given notice to pull together their US likeminded companies under the "Constellation", at least their management plan, which is profit.
If they are successful, I believe shareholders will see some serious multiples of shareprice and I believe that they will continue to finance and back their $5 billion investment with more financing, while lobbying politicians for what this new industry needs by way of law and regulations to level the playing field with beverage alcohol.
STZ has half a dozen US investments in like minded cannabinoid businesses and they made those investments at much better deals because they could due to the market downturn.
Cannabinoids aren't going away, only the weak companies, without a plan or ability to raise capital to get to the winner's circle.
glta and dyodd