(Reuters) - The biggest of Canada’s booming pot growers, Canopy Growth Corp, has further to go on a string of acquisitions that has seen it suck up at least 12 smaller firms in a year, but it is done buying other producers, Chief Executive Officer Bruce Linton said.

FILE PHOTO: Canopy Growth CEO Bruce Linton takes photos ahead of the first legal recreational marijuana sale at a Tweed retail store in St John's, Newfoundland and Labrador, Canada October 16, 2018. REUTERS/Chris Wattie

Powered by a deal with Corona-maker Constellation Brands Inc that has left it with $4.5 billion to invest, Canopy is in pole position to cash in on Canada’s legalization of marijuana for recreational use as well as expectations that the United States may follow.

Constellation is betting in part on the promise that federal legislation might eventually follow moves by state governments in the United States to legalize, opening the door to legal production countrywide, and there have been tentative signs that others may follow.

Coca-Cola Co last year quashed a handful of reports that it was looking at developing cannabis-infused drinks and analysts have pointed to the area as a possible next investment for “sin stocks” like tobacco and alcohol makers.

Linton said that with Canopy taken, the other companies on offer in the sector looked too small to tempt major potential investors, pointing to the likelihood of more consolidation within the sector first.

He also said his own firm had bought as many producers as it needed and would focus instead on companies that may provide synergies with his central business of growing the plant.

“We will not be buying anyone who currently produces cannabis in Canada for sure,” Linton said. “We’re more interested in what exists in the pharmaceutical world than the cannabis world.”

When asked whether Canopy would consider acquiring growers outside Canada, Linton said there were no companies outside of Canada he would consider buying.

Canopy acquired medicinal marijuana producers in South America and Africa last year, and in April secured the right to buy New York based Acreage Holdings Inc for $3.4 billion if the United States legalizes production and sale of cannabis.

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JUST LIKE GIN AND TONIC

The pot industry has seen a string of deals in recent months buoyed by the possibility of cannabis-infused products becoming legal at a federal level in the United States.

Recreational use is now legal in 10 states and the District of Columbia. Growers have also been looking to get early advantage in new markets in Latin America and Europe.

Curaleaf Holdings Inc, an integrated cannabis operator in the United States, in May announced a deal to buy Cura Partners Inc’s Select brand, which it said would make the world’s biggest player by revenue. Canopy, worth C$17.76 billion ($13.47 billion) at current share prices, had revenue of C$226 million in its last fiscal year.

Linton was confident in the scale his company had developed so far and said other producers would have to merge to compete or pique the interest of other investors.

“We’re operating with a balance sheet that has $4.5 billion on it ... if you’re a small guy and you have $30 million or $50 million, you should smash five or six (companies) together to create a depth of capacity in financial resources necessary to go global,” Linton told Reuters.

Linton, whose recent investments include bio-pharma company C3 and British skincare company This Works, said Canopy was working on cannabis-infused drinks that would serve as an alternate to alcohol for people averse to hangovers.

“Tweed and Tonic”, which Linton said would come in ready to serve containers, would taste a little like lemon and appeal to older drinkers concerned about the impact of alcohol on their weight.

“Some of our more sophisticated products will be very appealing to people of 60 to 75 years of age who have great spending capacity but can’t consume alcohol for a variety of reasons.”

“It will be like sipping a single serving of gin and tonic except it won’t have calories,” he said.