Constellation Brands' (NYSE:STZ) stock has delivered incredible returns to investors over the past decade. The beer giant's shares have surged nearly 1,000% during this time, meaning that investors have earned more than 10 times their money in a period of 10 years. 

Yet over the past year, Constellation Brands' stock is down nearly 10%. Have its shares peaked, or could this recent pullback be a buying opportunity? Let's find out.

Cannabis and a half-full glass of beer

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A strong, cash-generating core business

Constellation has an impressive collection of high-end beer brands, including Corona, Modelo, and Pacifico, among others. These brands are enjoying some of the fastest growth in the industry and are helping Constellation steadily increase its share of the nearly $120 billion U.S. beer market. 

The alcoholic beverage titan has also been selling off its lower-end wine and spirit brands to better focus on its faster-growing premium brands. Recent deals with E. & J. Gallo Winery and Heaven Hill Brands should raise approximately $2 billion for Constellation, which the company plans to allocate toward debt repayment. In addition to strengthening its balance sheet, Constellation's brand sales are also helping to position its remaining wine and spirits portfolio for accelerated growth.

All told, Constellation expects its overall alcoholic beverage portfolio to generate approximately $2.2 billion in operating cash flow and $1.4 billion in free cash flow in fiscal 2020. Management is committed to passing much of this cash on to investors via share repurchases and a growing dividend, which currently yields about 1.6%. Constellation's robust cash flow generation, bountiful capital returns, and consumer staples-focused business model help to make its stock a relatively low-risk investment. Yet it also has tremendous upside potential, due in part to its aggressive investments in cannabis.

A cannabis leaf in a glass of beer

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Cannabis-fueled upside

Constellation invested $4 billion in exchange for a nearly 40% stake in marijuana powerhouse Canopy Growth (NYSE:CGC), along with warrants that give it the right to increase its share to 50%. Canopy is the largest publicly traded cannabis company -- and for good reason: Its global production and distribution network is rivaled only by fellow industry titan Aurora Cannabis.

As such, Canopy Growth is one of the companies best positioned to profit from the cannabis boom. That's saying something, as the marijuana industry is projected to generate as much as $200 billion in annual sales within the next decade, according to investment firm Stifel.

Investors have recently soured on Canopy's stock, as the cannabis leader's heavy growth investments have produced sizable losses in recent quarters. That, in turn, has weighed on Constellation's reported profits.

Yet Constellation's leadership team remains bullish on their investment in Canopy. CEO Bill Newlands said during Constellation's second-quarter earnings call that he's looking forward to Canopy's upcoming launch of higher-margin cannabis-infused drinks and edibles, as well as its new cannabidiol-based products. 

Canopy Growth recently appointed Constellation's chief financial officer, David Klein, as chairman of its board of directors. Klein is tasked with helping to guide the cannabis company toward profitability and spearhead its search for a new long-term CEO. If Klein is successful -- and his solid 15-year performance record at Constellation suggests he will be -- Canopy's losses should lessen over time, and the marijuana giant could eventually become a powerful growth driver for Constellation Brands.

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Worth the price

At about 25 times its projected free cash flow in fiscal 2020, Constellation Brands' stock isn't cheap by traditional valuation metrics. However, with its leading brands likely to continue to gain share in the massive U.S. beer market and the tremendous upside potential of its Canopy Growth stake, Constellation could become far more valuable than its current $35 billion market capitalization in the coming decade. As such, this alcohol and marijuana stock looks like a solid buy for patient, long-term investors today.