Constellation Shares Dip, Slashes Guidance Amid Cannabis Investment

The Constellation Brands company had its shares drop on Wednesday after changing much of its guidance forecasts for future earnings. The company owns several alcoholic beverage brands such as Corona and Modelo beer, Meiomi wine, and Svedka vodka, and recently invested around 4 billion dollars in Canadian cannabis producers Canopy. The major investment may have shaken things up a bit for shareholders, with many stating that the future for alcohol producing companies is in the growing cannabis industry, and others seemingly wary of the company entering unknown territory.

The uncertain future of not only cannabis infused products but also shrinking beer markets had led Constellation to change their guidance policies, in turn spooking many investors into selling off stock. Perhaps the bigger but less juicy contributing factor to the sell off is the overall downturn in beer sales in the US, which have fallen below wine and liquor last year. Constellation also announced a shift in focus to premium wines recently. The company’s shares dropped nearly 11.5 percent Wednesday, a drop many are chalking up to an overreaction in a strong but volatile market, as investors fear any unstable stocks while trouble with trade brews just below the surface.

Anheuser Busch and even Coca-Cola had both made certain moves last year towards the now legal Cannabis industry in Canada, with eyes toward the future in the US, but Constellation was the only major beverage company to put their money up in regards to the new industry. Despite the shares dip, execs at Constellation are optimistic about the future.

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6 months ago