Constellation Expects Quarterly Losses of $ 54.8 Million Related to Canopy Investments

(Reuters) – Constellation Brands Inc (STZ.N) expects to record a loss of about $ 54.8 million in the current quarter, resulting from its $ 1 billion investment in the Canopy Growth weed producer.WEED.TO), announced Monday the brewer Corona.

The brewery's estimate comes after Canopy CEO Mark Zekulin informed investors earlier this month that he still needed three to five years to make a profit.

Constellation has invested more than $ 4 billion in Canopy, a loss-making company, for a nearly 56% stake in the marijuana growers, leveraging the proposed legalization of the hobby grass in several countries. (Bit.ly/30z9beN)

In late June, Constellation executives told analysts that they were not satisfied with the Canopy money loss and that they were working with the weed grower to conquer markets. and become profitable.

The following month, Canopy fired its founder and co-CEO, Bruce Linton, a move that analysts said was orchestrated by Constellation.

Canopy has not been able to generate a profit, even though it is recording rising sales, as the company is investing in new equipment, product research and marketing.

Zekulin, of Canopy, said this month that the company had lost market share in the last eight months as its competitors increased inventories and the company focused on changing its production base.

Constellation recorded a loss of $ 1.30 per share in the first quarter, compared to a profit of $ 3.77 a year ago, mainly because of a loss of 20 cents per share related to Canopy.