Constellation brand investment in the world's largest companies traded in the marijuana market already pays off.
In his income statement on thursday morning, the company behind the Corona beer, Svedka vodka and other alcoholic beverages stated that its two Canopy Growth has already invested more than $ 1 billion in unsold profits thanks to an increase in marijuana stocks.
“The realized baseline results reflect an unrealized profit of $ 639 million. US to increase the fair value of the initial investment in the corporation Canopy Growth Corporation, unrealized profits of $ 1.3 billion. USA was recognized after investment in November 2017 ", Constellation Brands said in their earnings issue.
Compared to November, the increase in the share of sheds grew by more than 285%when Constellation first announced an investment in the company. He continued his initial bet with plans to invest another $ 4 billion by the end of this month.
At a conference with Wall Street analysts and reporters on Thursday, CEO Rob Sands reiterated that investing in Canopy Growth is an offensive step toward innovation in a rapidly changing space, as opposed to a defensive move.
“We are not a company that sits, waiting for some element of our business to refuse or become bad before we act,” he said. “We are opposed to this. When it gets bad, turning around is about 900 times harder than playing crime from a very strong position. ”
When all is said and done, Constellation will own about 38% of Canopy Growth growth and has orders available to increase this to a controlling interest. Bruce Linton, CEO of Canopy Growth, explained to Business Insider in July. why alcohol brands and cannabis companies were the perfect combination.
“We believe that people should have a choice in how they want to improve or change their socialization,” he said.
“Why do you have a drink on Friday night? This is about social lubrication. [Constellation] did not see themselves as a beverage company in the same way as an enterprise that provides these cases with some kind of elevator, if you wish, and this is an easy way to look at cannabis, not as a threat, but as an alternative or additional.