Constellation Brands Inc. on Aug. 26 said the company's investment in Canopy Growth Corp. will result in a non-GAAP net loss of $38.5 million for the second quarter ending Aug. 31.
In 2018, Constellation Brands raised its shareholding in the Canadian medical cannabis producer to around 37% with an investment of C$5 billion.
The maker of Corona and Modelo beers updated its outlook after Canopy Growth's net loss grew 1,308% year over year to C$1.28 billion for the first quarter ended June 30. Canopy Growth Co-CEO and Chairman Bruce Linton had stepped down in July, subsequent to the release of the company's fiscal 2019 fourth-quarter results.
During an earnings call in June, Constellation Brands Executive Vice President and CFO David Eric Klein disclosed that the company recognized an $828 million decrease in the fair value of its Canopy Growth investment for the first quarter of fiscal 2020.
CEO William Newlands also said in the call that the company is "not pleased" with Canopy's fiscal 2019 year-end results.
Constellation Brands expects to report a non-GAAP net loss of $77.3 million for the six months ending Aug. 31, including benefits from income taxes.
As of Aug. 8, the New York-based alcoholic beverages maker owns an approximately 35.47% stake in Canopy Growth.