A broader market selloff hit Constellation particularly hard, as investors soured on companies with elevated debt loads and cyclical exposure. A disappointing 2019 outlook in early January didn’t help matters either.

Canadian cannabis companies had a wild 2018, with many seeing their stock prices double and triple in the summer, only to deflate in the fall. Recreational cannabis use became legal up north in October, and several U.S. states approved recreational or medical use in referendums in November.

Back in August, Constellation Brands made waves with the largest bet ever on cannabis, putting $4 billion into Canadian marijuana producer Canopy Growth. The deal gave Constellation effective control, with the right to appoint four of seven directors on Canopy’s board. Constellation also gained a foot in the door of the rapidly growing cannabis market.

Where we’re headed. At competing cannabis producer Aurora Cannabis ’ (ACB) investor day on Tuesday, Wells Fargo analyst Bonnie Herzog and her team got an independent view of where that market is going in coming years. (On Monday, Aurora reported quarterly earnings that were a bit better than Wall Street’s expectations.)

Aurora sees $200 billion a year in retail sales in three to five years and a rapidly maturing competitive environment. Herzog sees the global industry consolidating from the dozens of relatively small players involved in cannabis products today, and winners emerging as regulatory and political frameworks develop and other mergers and acquisitions and partnerships are struck.

Constellation’s move to get in early with Canopy certainly looks more prescient today than it did in August. While Aurora focuses on medical cannabis, Herzog sees Canopy succeeding in high-margin consumable cannabis products, including cannabis beverages. Canopy’s scale, first-mover advantage, and partnership with Constellation Brands should all help it achieve a top-three ranking in the industry.

“Bottom line, we believe Constellation Brands’ decision to get in cannabis early and with Canopy Growth was the right one given the broad upward trajectory of the global opportunity, in our view, which will surely favor some players over others,” Herzog wrote in a report Wednesday morning.

Herzog reiterated her Outperform rating on Constellation Brands shares with a $235 price target. That represents about a 35% premium over their $174.62 price Wednesday morning.

Make the Connection.

Big pharma is also getting in on the cannabis game.

So is big tobacco.

So are competing beer companies.