Over the next year, we expect Canopy Growth to benefit from its strategic partnership with Constellation Brands (STZ), a multi-national beverage conglomerate that owns Corona. After Constellation announced its initial investment in Canopy Growth, we became very bullish on the long-term growth prospects of the Canadian cannabis company and are favorable on how the story has advanced since then.
Last night, Canopy Growth was featured on Jim Cramer’s Mad Money segment on CNBC. On the program, Canopy Growth CEO David Klein explained how it tests products in Canada before bringing them to the US market and has benefited from a test-and-learn process and expects Constellation to play a key role in how the product is distributed in the US.
This is not Canopy Growth’s first foray in the beverage market and in 2019, it acquired a majority stake of Biosteel, a sports nutrition products maker. CEO Klein expects Constellation to play an important role in how Biosteel branded products comes to market. We are favorable on the expertise that Constellation adds to the Canopy Growth team and expect the relationship to be a long-term leader in the global cannabis industry.
One of the reasons we are excited about the Quatreau CBD beverage line is based on its performance in Canada.
-->Last year, Quatreau was the top-selling CBD beverage and benefited from a large spike in demand for cannabis-based products during the COVID pandemic.
The Quatreau beverage line that is sold in US will include 20 milligrams of hemp-based CBD that was grown in the US. We are favorable on the route that Canopy Growth is taking with sourcing premium hemp-based CBD and will be closely following this aspect of the story.
Although Canopy did not say when it plans to carry the product in US stores, we expect the brand to play an important role in its strategy
to have a --> first mover advantage in the emerging US cannabis market and we will monitor how the leadership team from Canopy Growth and Constellation are able to execute on this.
During the last year, we have seen as spike in the number of Canadian cannabis producers that are focused on both the cannabis beverage and the US market.