Cannabis could be a kingmaker in consumer packaged goods, according to one cannabis industry CEO.
The cannabis industry certainly seems to be coming out of the shadows as of late, with comments from New York Governor Andrew Cuomo as well as A.G. nominee Bill Barr coaxing investors from hiding.
"Anybody in the spirit industry [could be getting into cannabis], you can see that from Constellation Brands (STZ) ," Todd Kaplan, CEO of the California based cannabis leader Vertical Companies told TheStreet. "You know the question is: Is a 21 year old going out after work on a Friday or Saturday night and having a couple of drinks or is he using [cannabis]? I think they're certainly worried about that."
He added that the farm bill is only going to accelerate the space's appeal to these companies as it allows for Cannabidiol (CBD)-focused products to enter the giant U.S. market. He anticipates this is a solid precedent for legalization of marijuana more broadly, that was reflected in mid-term referenda.
"I mean look we have over 30 states that have passed some form of legalization now. I tell people all the time once you get too much toothpaste on the brush you can't put it back into the tubes," Kaplan commented. "This is going to happen. It's a matter of when."
To be sure, he said the state-specific legislation in place currently presents a roadblock to many companies operating across state lines and adds to uncertainty for multi-nationals looking to branch beyond the legal Canadian market, including industry leaders like Canopy Growth Corporation (CGC) , Tilray (TLRY) , and Cronos (CRON) .
However, as the veneer of the "wild, wild west" fades from marijuana's moniker, deals like Constellation's could serve to create more stars in CPG and even pharmaceuticals as the space explodes open.
For Kaplan's take on the industry's prospects, check out the interview above. For more on Kaplan's unusual journey to the top of cannabis' crop, click here.