Constellation Brands Inc's Rob Sands is stepping down as CEO, ending an era in which the family-backed alcohol producer became one of the biggest beer brewers in the United States and placed a multi-billion dollar bet on the cannabis industry.
Constellation, the maker of Corona beer and Svedka vodka, said Bill Newlands, an industry veteran and Constellation's current president, will succeed Sands as CEO. Newlands will become the first person outside the Sands family to take the role.
Sands, 60, will become executive chairman in March, replacing his brother Richard.
Sands, who became CEO in 2007, led Constellation through some of its most transformative years, during which it bought the U.S. rights to sell Mexican-made Corona beer and saw its shares multiply almost tenfold.
The Victor, New York-based company, one of the first major alcohol companies to invest in the marijuana industry, made a further $4 billion bet on Canadian cannabis producer Canopy Growth Inc in August 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 nation to legalize recreational cannabis, a burgeoning industry that many say has the potential for massive growth.
Wall Street analysts were largely unsurprised 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, a plan also adopted by other alcohol producers including Jack Daniels whiskey maker Brown-Forman.
"The Street may welcome a non-family CEO, although this does mark the end of an incredibly successful tenure for Rob Sands," analysts at Macquarie Research said in a client report. "Newlands has a strong team reporting to him, so we expect no changes in Constellation's strategy."
Constellation shares were slightly higher at $228.57 in extended trading on Wednesday.