Constellation Rebounds as Investors Eye Potential in Canopy Growth Cannabis Play - TheStreet.com
Thestreet.com - Thu 10 Jan 14:00 GMT

Constellation Rebounds as Investors Eye Potential in Canopy Growth Cannabis Play - TheStreet.com

Constellation Brands looked to rebound Thursday after weaker-than-expected quarterly earnings and a muted outlook pegged to rising costs associated with its $4 billion investment in cannabis specialists Canopy Growth Corp. CGC sent its shares to a two-year lo…

  Constellation Brands (STZ)  looked to rebound Thursday after weaker-than-expected quarterly earnings and a muted outlook pegged to rising costs associated with its $4 billion investment in cannabis specialists Canopy Growth Corp. (CGC) sent its shares to a two-year low.

  The reduction was linked to a pre-tax impact of around 25 cents a share from its debt-backed Canopy Growth investment in 2017, and a $164 million decrease in the fair value of the stake over the three months ending in November.

  Incoming CEO Bill Newlands, who replaces the retiring Rob Sands later this year, also cited weakness in the group's low-end wine business, but reiterated his faith in the company's move into the cannabis space, predicting a billion dollars in annual sales within the next 18 months.

  "As we've discussed, we believe the emerging cannabis space represents one of the most significant global growth opportunities of the next decade, and frankly, our life time," he added.

  Constellation brands shares were marked 3.1% higher in pre-market trading at $155.62 each, following yesterday's 12.5% decline, a move that would still leave it with a three month decline of around 30%.