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Constellation Brands' stake in weed firm Canopy Growth paying off

Cannabis is a buzz topic in Canada currently. Last month Canada passed a law legalising the recreational use of marijuana
Constellation Brands' stake in weed firm Canopy Growth paying off
Constellation is seeing good growth from Canopy stake

Canada-listed cannabis firm Canopy Growth Corp (TSE:WEED) certainly seems to be a growth driver at Corona beer owner Constellation Brands Inc (NYSE:STZ).

The firm, which also owns Svedka vodka, said it had recognised gains of more than US$700mln since it invested in the weed giant in  October 2017.

Cannabis is the buzz topic in  Canada at the moment and last month saw it pass a law legalising the recreational use of marijuana- the second country on the planet to do so after Uruguay.

Legal standing

Pot is legal for medicinal purposes in 14 European countries -  Israel, Argentina, Puerto Rico, Panama, Mexico, Turkey, Zambia and Zimbabwe.

And in the huge USA market, medicinal use is allowed in 29 states and the District of Columbia. Nine states have legalised both medical and personal cannabis use.

Constellation took a 9.9% stake in Canopy Growth last October - a move, which analysts said was a clever one..

Canopy Growth shares are up nearly five times' in the last 12 months, gaining 378%.

On Friday, Constellation posted first-quarter numbers, which saw profit lagging estimates

Adjusted per-share earnings for the three months were US$2.02, below consensus of US$2.44 per share.

Today, Constellation Brands Inc shares were down 0.73% to stand at US$217.28 each.

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