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Constellation Brands reveals expected US$132.5m H1 loss from Canopy Growth tie-up

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Constellation Brands is set to record a US$132.5m first-half loss from its Canadian cannabis partner, Canopy Growth.

Constellation Brands has a 38% stake in Canopy Growth

Constellation Brands has a 38% stake in Canopy Growth

The Svedka owner, which has paid more than US$4bn for a 38% stake in Canopy, revealed the net income loss in an SEC filing yesterday. The expected loss, which covers the six months to the end of this month, follows the exit of Canopy Growth's CEO, Bruce Linton, in July after his company's FY net losses widened to CAD670m (US$504m) compared to a loss of CAD57m in the year-prior.

In the SEC filing, Constellation said its losses from Canopy were based on its stake in the company and the current Canadian/US dollar exchange rate. Constellation, which is likely to announce its H1 results in October, said Q1 losses from Canopy were calculated to be US$54.3m.

Constellation's management has spoken about Canopy's performance already this year. A week before Linton left the company he helped found, Constellation CEO Bill Newlands said he was "not pleased" with Canopy's latest full-year results.

Linton founded Canopy Growth in 2013. The company is the first federally-regulated, licensed, publicly-traded cannabis producer in North America.

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