The Globe and Mail reports in its Tuesday, Aug. 27, edition that Constellation Brands said Monday it expects to record a loss of about $54.8-million (U.S.) in its current quarter from its billion-dollar investment in Canopy Growth.
A Reuters dispatch to The Globe reports that Canopy chief executive officer Mark Zekulin said earlier this month the weed producer needs another three to five years to turn a profit.
Constellation invested more than $4-billion (U.S.) in Canopy for a nearly 56-per-cent interest, banking on the proposed legalization of recreational weed in several countries.
In July Canopy fired founder and co-CEO Bruce Linton, a move that analysts believe was orchestrated by Constellation.
Canopy has not been able to turn in a profit even as it records soaring sales, as the company invests on new equipment, product research and marketing.
Mr. Zekulin earlier this month said Canopy has lost share in the past eight months as rivals ramped up supply and the company focused on modifying its production base.
Constellation reported a loss of $1.30 (U.S.) a share in the first quarter compared with a profit of $3.77 (U.S.) a year ago, mainly because of a 20-U.S.-cent-per-share loss related to Canopy.
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