(Reuters) – Constellation Brands Inc. ( STZ.N ) Rob Sands steps down as CEO, ending an era in which the family-backed alcohol producer is one of the largest beer brewers in the United States became states and placed a multi-billion dollar bet on the cannabis industry.
Corona beers are on a BevMo! Store in front of Constellation Brands Inc Company Results in Pasadena, California, USA, October 4, 201
Constellation, the maker of Corona Beer and Svedka vodka, said Bill Newlands, an industry veteran and president of Constellation Sands success as CEO. Newlands will become the first person outside the Sands family to take the role.
Sands, 60, becomes chairman of the board in March and replaces his brother Richard.
Sands, who became CEO in 2007, led Constellation through some of his most groundbreaking years, buying US rights to sell Corona beer produced in Mexico, increasing its share almost tenfold.
New York-based Victor, one of the first major alcohol companies to invest in the marijuana industry, made another $ 4 billion bet on Canadian cannabis producer Canopy Growth Inc ( WEED.TO ) in August of this year.
As chairman, Sands will focus on Constellation's investment in Canopy Growth, he told The Wall Street Journal.
The investment came two months before Canada became the first industrialized country to legalize recreational cannabis, a burgeoning industry many say has potential for massive growth.
The Wall Street analysts were largely surprised by Sands' move.
Consumer Edge's Brett Cooper said the move was in line with Constellation's broader strategy of being controlled by the Sands family and managed by outsiders. Also other alcohol producers such as Jack Daniels whiskey maker Brown Forman ( BFb .N ).
"The Street may welcome a non-family CEO, although this represents the end of an incredibly successful term for Rob Sands," said Macquarie Research analysts in a customer report. "Newlands has a strong team reporting to it, so we do not expect any changes in Constellation's strategy."
The Constellation share was trading at $ 228.57 on Wednesday's trading session.
Reporting by Uday Sampath in Bengaluru; Editing by Sai Sachin Ravikumar