Beer Carries Wine, Now It Carries Cannabis

Dear Client: While they "continue to like" Constellation's beer business, Macquarie beverage analyst Caroline Levy is downgrading STZ to neutral from outperform, due to its earnings outlook. WHY? Canopy Growth, the giant cannabis producer in which Constellation has invested, posted "significant losses" for its Q2FY19, which the firm believes will continue "for another six quarters." As a result, "We cut our STZ estimates on lower-than-street estimated Canopy equity income over the next 3 yrs," per firm. LEGAL WEED IN CANADA