CHICAGO _ Beer and wine giant Constellation Brands warned Monday it will lose $54.3 million in the current quarter from its nearly $4 billion investment in a Canadian-based weed company.
In 2017, Constellation, based in Victor, N.Y., made an initial investment in Canopy Growth as it sought to capture a portion of the recreational marijuana market, a market expected to grow as states legalized its consumption. Constellation raised its stake to 38% in August 2018.
Earlier this year, Constellation wrote down $160 million of its investment in Canopy. At the time, analysts said while Canopy would be a major player as the cannabis market continues to grow, perhaps Constellation had poured too much money into the company too soon. In July, Bruce Linton, Canopy's co-CEO was fired as the company reconfigured its board and top leadership.
Constellation's current stake in Canopy, which produces and sells cannabis in dried, oil and soft-gel capsules, is 35.6%, according to securities filings. Its six-month loss will be $132.5 million, Constellation said in the filing.
