ACRGF - Why Constellation Brands Investors Shouldn't Be Discouraged by Canopy Growth's Recent Losses
When Constellation Brands (NYSE: STZ) announced it was investing in Canopy Growth (NYSE: CGC), there was a lot of hope that it would help give the beverage maker a good way to diversify into another industry and tap into some exciting new products that its customers can get behind as well. While there's still plenty of potential, the initial excitement has been replaced with frustration as the cannabis producer's lack of profitability weighed down Constellation's recent results.
That doesn't sit well with investors, and Canopy Growth is now in the midst of finding a new CEO after ousting its co-CEO Bruce Linton. Mike Zekulin, who was the other co-CEO now holds the title all to himself and remains on board, but only until a new leader is found.
In recent months, Canopy Growth's stock has taken a beating. From highs of more than $50 earlier this year, the stock has now been cut in half. However, there's been lots of noise and controversy in the industry lately and that has contributed in not just Canopy Growth falling, but other cannabis stocks seeing big declines as well. The good news for investors is that means there are likely market and industry forces weighing the stock down rather than the decline being entirely Canopy Growth's own doing. This indicates there's a better chance the stock recovers, since the business is still relatively unchanged, as is the case in Canopy Growth's situation.