US – Constellation Brands has remained upbeat that the changes to Canopy Growth, a cannabis business in Canada, and the U.S., are positioning it for success after recording a US$1.1 billion write-down in the value of its investment in Canopy.

While Constellation’s large investment in Canopy four years ago has been proven to be ill-timed because of stalled federal legislation that has prevented growth in the category that Constellation and other companies were hoping for.

Despite the uncertainties in the cannabis-infused beverage market, there are signs of optimism in the cannabis sector.

President Biden announced he would pardon all prior federal marijuana simple possession offenses. He also asked the heads of the Department of Health and Human Services and the Department of Justice to “review expeditiously” how the drug is classified under federal law.

David Culver, vice president of government relations Canopy commented: “President Biden has set into motion the actions needed to heal the harms of the past and chart a course for responsible, legal cannabis markets in the future.”

The announcement stoked optimism that it could be the first step toward legalizing it nationally. So far, 37 states and Washington, D.C. have approved marijuana for medical use, with 10 passing laws allowing the use of CBD with little to no THC, according to the National Conference of State Legislatures.

The passage of the 2018 Farm Bill, which allowed hemp and its derivatives to no longer be classified as controlled substances, was a significant move for CBD, which can be sourced from this relative of the cannabis plant. However, it is still federally illegal to add cannabis and its derivatives to food and drink.

The partnership of Constellation Brand and Canopy Growth, the world’s largest publicly traded cannabis company, started in 2018 that has resulted in the beverage giant owning a 40% stake in the cannabis company.

The Corona brand owner added that Canopy has an edge over other firms in the U.S. because of its acreage layouts, which sets them up to win in the future.

Constellation and Canopy’s partnership has led to some U.S. product launches in states that permit the consumption of CBD.

Last October, enhanced water maker Karma launched its CBD Water it created in partnership with Canopy, just a few months after Canopy launched its CBD-infused Quatreau sparkling water brand in states that permit CBD consumption.

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro-industry. SUBSCRIBE HERE.