What do YouTube, Waze, and Android have in common?
They are all owned by the company Alphabet… better known as Google.
When it comes to acquisitions, Google is a beast. In 2010, they were buying almost one company per week. Today, they own well over 200 companies that they have integrated somehow into their overarching tech kingdom.
Why would Google do that? Why would they go out and buy all of these companies?
Well… if you have ever used the internet, I’m sure you can answer that yourself. In the US, it’s nearly impossible to go through a day without using a Google product.
Whether it’s maps, videos, music, email, or just a search engine… you’re bound to run across one of their products. To put Google’s reach into perspective, it’s estimated that there are over 100,000 search inquiries per second on their platform.
Google absolutely dominates the internet and probably knows more about all of our daily habits than we do… (that’s a whole different story!)
The point is that Google very strategically acquired specific companies that would allow them to spread their influence. Amazon, Apple, and Facebook have also acquired hundreds of companies so they can dominate their respective industries.
That is exactly why Constellation Brands is investing heavily into the cannabis industry.
I already mentioned this last year, when Constellation brands invested nearly $200 million into Canopy Growth. Now that they’ve upped their investment by nearly $4 billion, I think it’s safe to say that they are serious about entering the cannabis industry.
And why wouldn’t an alcohol company want to also be in the cannabis industry?
For many people, consuming cannabis results in the same desired effects as consuming alcohol. Whether it’s relaxing at the end of the day, trying to clear your mind, or taking the edge off of physical pain, the effects are very similar.
The big difference is that cannabis doesn’t give you a hangover, it’s not fattening, and it can be consumed in a less obvious way.
That’s why I personally believe that the biggest future consumers of marijuana will be middle aged professionals with a family. (And that’s why we’ve invested heavily into the industry, and plan to do more.)
After a long day at work, followed by an evening of kids yelling in your face, most parents just want to relax. But, they also don’t want to be holding an alcoholic drink in front of their kids, and most importantly they don’t want to wake up with a hang over.
Constellation Brands see this exact trend and they are positioning themselves to slide right into being a dominate player in the cannabis industry.
What’s shocking is that other alcohol companies haven’t followed suit. (But they will…)