The brewer of Corona and Negra Modelo said Wednesday it wrote down the fair value of its Canopy investment by $534 million during the quarter. Reports the NY Times
Constellation Brands took another big hit from its bet on Canadian pot company Canopy Growth, which shaved the most recent quarter’s earnings by more than 10 percent.
The brewer of Corona and Negra Modelo said Wednesday it wrote down the fair value of its Canopy investment by $534 million during the quarter.
Constellation acquired its stake in Ontario-based Canopy, the world’s largest cannabis company by market value, through major share purchases in 2017 and 2018. Those investments, which originally totaled $4.1 billion, have since declined by 37 percent to $2.6 billion.
Victor, NY-based Constellation has publicly criticized Canopy’s performance, while Mark Zekulin, who stepped down as Canopy’s CEO in December, has claimed too much weed and too few stores to sell it in are hindering Canada’s legal pot industry.
A recent report from Jefferies estimated that the black market accounted for 71 percent of all pot sales in Canada last year and that legal pot, once taxed, still costs 83 percent more than illegal pot.