Big Alcohol hype lifts marijuana stocks higher

Constellation Brands Inc. — the $40 billion brewer of Corona beer, vintner of Mondavi wines, and distiller of Black Velvet whiskey — helped drive select marijuana stocks higher on Wednesday after Constellation's COO trumpeted that the legal cannabis industry was well on its way to becoming a global force.

FILE – In this April 1, 2010, file photo, a customer places a case of Corona Extra on the checkout counter for purchase at Susquehanna Beer and Soda in Marysville, Pa. Constellation Brands, the parent company of Corona beer and other alcoholic drinks, expanded its stake in h Canopy, a Canadian pot producer.Read moreFILE

by Sam Wood

Updated Sept. 5, 2018, 5:26 p.m. ET

Published Sept. 5, 2018, 5:14 p.m. ET

Constellation Brands Inc. — the $40 billion brewer of Corona beer, vintner of Mondavi wines, and distiller of Black Velvet whiskey — helped drive select marijuana stocks higher on Wednesday after Constellation's chief operating officer trumpeted that the legal cannabis industry was well on its way to becoming a global force, according to Bloomberg News.

"We think this is going to be a big business worldwide," said Constellation's Bill Newlands, Bloomberg reported. "This is not going to be limited to Canada. This will undoubtedly be a market that develops in the United States. It's developing around the world in places like Germany and Australia and other markets."

Canada will legalize marijuana for adult recreational use on October 17. Arcview's North American Marijuana Index, or NAMMAR, has gained nearly 200 percent during the past year.

Constellation, of upstate New York, has poured nearly $6 billion into Canopy Growth Corp., a Canadian cannabis company. Constellation holds a nearly 40 percent stake in the Ontario-based marijuana grower. The American company has expressed interest in producing THC-infused drinks and sleep aides. But U.S. distribution of any product containing THC, the psychoactive ingredient found in cannabis, remains unlikely in the near term. Marijuana and its derivatives are forbidden by the federal government despite its recent approval of the anti-seizure medicine Epidiolex. The FDA stubbornly considers marijuana a Schedule 1 substance, equivalent to heroin or LSD, and without any legitimate medical use.

Constellation and Canopy closed slightly down on Wednesday. But the stocks of two other Canadian marijuana producers soared. Tilray Inc., closed at $89.86 up 16.7 percent. and Cronos Group Inc., which announced a partnership with Boston biotech firm Gingko Bioworks on Tuesday, closed at $12.44, up 11.6 percent.