It’s not been easy for drinks giant Constellation Brands since it invested $4 billion in Canada’s leading pot producer. Canopy Growth is not only hemorrhaging money, it now is delaying the launch of its long-planned cannabis drinks that hoped to counter falling beer sales.
Here’s the deal…
Canopy Growth, whose largest shareholder is drinks giant Constellation Brands, has postponed the launch of a line of cannabis drinks as it hasn’t been able to scale its production to commercial levels yet.
According to The Drinks Business, “The grower had planned to launch its first cannabis drinks across Canada in January, but having only received its license to produce drinks infused with THC (the psychoactive component of the plant) in November, needed to scale up.
This from Canopy Growth’s chief executive David Klein…
“Canopy has had seven weeks to work with THC in the brand new beverage facility to scale processes and IP it has developed in the R&D environment…In order to deliver products that meet our customer’s high standards we are electing to revise the launch date while we work through the final details.”
The company has not given a revised launch date for the THC-infused drinks line but said an update will be given alongside Canopy’s third quarter results expected next month. However, the company said that the current delay would not have an impact on its fiscal performance for 2020.
On January 8th Victor, NY-based Constellation Brands, home to Mexican import brands Corona, Modelo and Pacifico and craft beer brands, Funky Buddha and Four Corners posted its third quarter earnings that largely beat expectations but revealed a $534 million loss on its investment in Canopy Growth, a leading Canadian cannabis producer.
Canopy Growth’s delayed progress comes as cannabis has already proven to be a lucrative industry in Canada.
Recreational cannabis use has only been fully legal in Canada since October 2018, but since then, volume sales of domestic beer in the country fell by 3.9% according to findings published by Beer Canada.
Canopy Growth reported losing $1 Billion in just three months last year and fired its co-CEO, Bruce Linton, who founded the pot producer in 2013, a week after Constellation CEO Bill Newlands expressed disappointment over its financial losses. And the company has said it could be years before investors see a profit on the costly venture.