CGC - Canopy Growth Corporation

NYSE - NYSE Delayed Price. Currency in USD
+0.77 (+2.82%)
At close: 4:02PM EDT
Stock chart is not supported by your current browser
Previous Close 27.34
Open 27.76
Bid 28.04 x 800
Ask 28.12 x 1000
Day's Range 27.44 - 28.57
52 Week Range 25.26 - 59.25
Volume 4,687,984
Avg. Volume 4,132,054
Market Cap 9.553B
Beta (3Y Monthly) 3.38
PE Ratio (TTM) N/A
EPS (TTM) -1.79
Earnings Date Nov 24, 2016 - Nov 28, 2016
Forward Dividend & Yield N/A (N/A)
Ex-Dividend Date N/A
1y Target Est N/A
Trade prices are not sourced from all markets
  • The $4 billion time bomb ticking away inside the biggest marijuana companies

    The $4 billion time bomb ticking away inside the biggest marijuana companies

    Cannabis companies that have made acquisitions at the height of excitement about Canadian legalization last year may be facing some big goodwill writedowns.

  • Weekly Cannabis Stock News: Canopy Growth's Ugly Q1
    Motley Fool

    Weekly Cannabis Stock News: Canopy Growth's Ugly Q1

    The bellwether marijuana stock delivered a very disappointing quarter, and Tilray's latest wasn't much better. Aurora Cannabis, meanwhile, gets to borrow a bit more money.

  • Cannabis Roundup on FIRE, ACB, CGC, and TLRY
    Market Realist

    Cannabis Roundup on FIRE, ACB, CGC, and TLRY

    Cannabis stocks mostly traded in positive territory today. Supreme Cannabis (FIRE) and Aurora Cannabis (ACB) rose about 9.5% and 5.5%, respectively.

  • InvestorPlace

    Is Hexo Stock a Falling Knife Or Has It Reached a Good Entry Point?

    The recent market drop has certainly been brutal and quite broad. But then again, this bear move is opening up interesting opportunities.Just look at the cannabis space. In fact, the downturn of marijuana stocks preceded the recent decline of the overall markets, as various public cannabis companies had a tough time meeting investors' lofty expectations.In yesterday's trading, Canopy Growth (NYSE:CGC) was, at one point, off 10.5% to $28.60 (the stock was over $50 a few months ago). That was after the stock had dropped 6.6% the day before. And on Wednesday, Tilray (NASDAQ:TLRY) dove 15%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe declines were kind of scary. But when it comes to investing, going against the grain can mean getting strong returns.One marijuana stock that should get attention is Hexo (NYSE:HEXO). Since late April, Hexo stock price has gone from $8.30 to $4.47.But HEXO has a number of positive characteristics. First of all, HEXO has gotten validation from Molson Coors (NYSE:TAP), which has formed a partnership with the cannabis company. The focus of the deal is developing a line of cannabis-infused beverages that will hit the market on Dec. 16th ( when such drinks will be legalized in Canada).All in all, the deal should provide Hexo stock with a nice catalyst. TAP will leverage its extensive marketing and logistical capabilities on behalf of HEXO's products. TAP's creative skills should help HEXO develop compelling products. The partnership really does look like a win-win.This is what the CEO of Molson Coors of Canada, Frederic Landtmeters, had to say about the deal: "We look forward to partnering with HEXO, a recognized leader in the medical cannabis space in Canada that will bring robust production capacity, a track record of innovation, and, most importantly, shared values when it comes to doing business the right way and earning the trust of consumers."But ultimately this is about more than just Canada. Because of the U.S. Farm bill, Hexo will be able to launch CBD-based drinks in eight states next year. Key AdvantagesThe TAP deal illustrates a main benefit of HEXO: the company's high production output. Note that it has about 30% of the Quebec market.Another critical factor is that HEXO acquired Newstrike Brands Ltd for $197 million. As a result of the deal, Hexo boosted its annual capacity by about 150,000 kilograms.Now it's true that Hexo stock is not without its issues. The company's last earnings report was a major disappointment. It revenue came in at 13.02 million CAD, representing a quarter-over-quarter drop of about 9%. while the Street was looking for $14.8 million.But the cannabis industry is still in the early stages, so choppy results are normal. Then again, the industry's fundamentals remain bright. That is why companies like TAP, Altria (NYSE:MO) and Constellation Brands (NYSE:STZ) have invested billions in the category. The Bottom Line on Hexo StockWhen it comes to the cannabis space, I think the key is to focus on the dominant players. Size will certainly be essential, given the competitive environment. And HEXO looks well-positioned to perform well over the long-haul.Yet the volatility of Hexo stock price will likely remain high. That is why it's a good idea to take moderate positions - or dollar-cost average - to help mute the wide swings of HEXO stock.Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Is Hexo Stock a Falling Knife Or Has It Reached a Good Entry Point? appeared first on InvestorPlace.

  • Charlotte’s Web Holdings Stock Down after Earnings
    Market Realist

    Charlotte’s Web Holdings Stock Down after Earnings

    Charlotte's Web Holdings stock (CWBHF)(CWEB) was down 6.6% yesterday after the company reported lower-than-expected Q2 earning results.

  • Wait Until the Dust Settles to Buy ACB Stock

    Wait Until the Dust Settles to Buy ACB Stock

    Aurora Cannabis (NYSE:ACB) stock has tumbled in line with the rest of the cannabis space. Shares fell from a high of $7.20 on Aug. 6 to $5.67 at the close Aug. 15. With negative sentiment in the marijuana space accelerating, what's the next move with ACB stock?Shares continue to trade at a valuation premium to peers Canopy Growth (NYSE:CGC) and Tilray (NASDAQ:TLRY). While the company has not experienced issues such as the scandal brewing at CannTrust (NYSE:CTST), little has changed on the catalyst front since my last article.With this in mind, what's the call on Aurora Cannabis stock? Read on to see whether ACB is a bargain (or a falling knife), at the current trading price.InvestorPlace - Stock Market News, Stock Advice & Trading Tips A Closer Look at Aurora CannabisOn Aug. 6, the company released an update regarding the quarter ending June 30, 2019. The company anticipates net revenue of between $100-$107 million for the quarter, up from $65.1 million for the prior quarter. Aurora Cannabis reiterates they are getting closer to positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). I take this projection with a grain of salt, given their continued cash burn.With their focus on the medical market, Aurora Cannabis seems like a safer play. While its peers focus on the recreational market, the company is smartly pursuing more prosaic business lines. Coupled with their focus on geographic diversification, the company stands a greater chance of achieving profitability. But is the company getting ahead of itself? Despite expected quarterly sales of only 25,000-30,000 kg., the company is growing funded capacity from 150,000 kg/year to 625,000 kg/year.Aurora Cannabis has yet to make moves into the American market. They have not yet found a strategic partner (despite hiring Nelson Peltz to do so). Perhaps it's a smart move to take their time. Given that Canopy Growth's partnership with Constellation Brands (NYSE:STZ) is highly dilutive, teaming up with a big consumer goods company may not be the best option for Aurora shareholders.Aurora Cannabis remains a work-in-progress. But in terms of valuation, is ACB stock a buy? Let's see how the valuation of Aurora Cannabis stock stacks up to peers. ACB Stock Still OvervaluedOn an Enterprise Value/Sales (EV/Sales) basis, ACB stock trades at a premium to Canopy Growth. Aurora Cannabis stock has an EV/Sales ratio of 52.4, compared to 50.4 for CGC. Tilray has an EV/Sales ratio of 42.8. ACB stock does trade at a valuation discount to Cronos (NASDAQ:CRON). Cronos has an EV/Sales ratio of 165.3. But in the case of Cronos, the company's partnership with Altria Group (NYSE:MO) continues to help support the share price.ACB stock is not only overvalued relative to Canopy and Tilray. Despite a trailing twelve month negative EBITDA of $154 million, the company has a market cap of $6.14 billion. Investor expectations continue to keep Aurora Cannabis at an inflated valuation. This means much of the potential upside remains priced into the stock.Additional downside could be in the cards for Aurora Cannabis stock. Making a pivot from dilutive capital raises, the company recently announced it boosted its secured credit facility from C$200 million to C$360 million. But replacing dilutive equity with leverage amplifies the company's risk. With continued cash burn, ACB stock could face liquidity issues, especially as we get closer to the conversion date of its convertible debt. As I mentioned back in July, the company will either have to convert the debt into ACB stock (which would be dilutive), or raise capital once the notes mature. Either way, Aurora Cannabis stock could fall further. Bottom Line: Continue to Avoid Aurora CannabisThe legal marijuana space continues to be speculative. Investors enjoyed the ride for the past few years, but now it seems they are heading for the exits. With its focus on the less glamorous aspects of the legal pot trade, Aurora Cannabis has potential. By chasing opportunities globally, they are less dependent on specific jurisdictions to sustain growth. With the company yet to make a move into the United States, Aurora could make opportune acquisitions of U.S.-focused cannabis companies.For the time being, the risks with ACB stock do not match up with the potential opportunity. With the company's heavy use of convertible debt, material downside risk remains. With the investor exodus just beginning, stay on the sidelines while the dust clears. ACB stock could be a screaming by at a fire sale price. For now, Aurora Cannabis stock remains a long shot bet.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Wait Until the Dust Settles to Buy ACB Stock appeared first on InvestorPlace.


    Canopy Growth Stock Plunged After Earnings. Some Analysts Say It’s Still Not Time to Buy.

    Canadian marijuana grower Canopy reported a huge quarterly loss and a sequential decline in sales, sending the stock down 20%. While some may see the drop as a buying opportunity, Wall Street analysts have mixed feelings.

  • Friday’s Vital Data: Walmart, Canopy Growth and Beyond Meat

    Friday’s Vital Data: Walmart, Canopy Growth and Beyond Meat

    U.S. stock futures are trading slightly higher this morning, though the overnight gains have been pared ahead of the bell.Source: Shutterstock Heading into the open, futures on the Dow Jones Industrial Average are up 0.50%, and S&P 500 futures are higher by 0.51%. Nasdaq-100 futures have added 0.69%.In the options pits, yesterday's neutral session took some of the wind out of the sails of options volume. Nonetheless, we still ended the day with above-average volume. Puts led the charge with about 22 million contracts traded versus only 20.2 million for calls.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt was the action at the CBOE that stole the show, however. Curiously, the single-session equity put/call volume ratio rocketed to its highest reading of the year, revealing mass fear on a day where the market didn't fall that much intraday. At 0.98, the metric is closing in on its super-spike from last December's market meltdown. Contrarians will point to the spike as a signal that a market bounce is nigh.Options activity surged in Walmart (NYSE:WMT), Canopy Growth (NYSE:CGC) and Beyond Meat (NASDAQ:BYND)Let's take a closer look: Walmart (WMT)Walmart shares soared over 6% on Thursday after WMT reported strong earnings results. The retail behemoth posted earnings of $1.27 on revenue of $130.4 billion. Both measures bested analyst estimates and had shareholders cheering in the street. E-commerce sales drove a lot of the growth with online grocery shopping continuing to see mass adoption. * 15 Growth Stocks to Buy for the Long Haul The rally in WMT stock reclaimed almost all that was lost during the past month's correction. At $112.69, it now sits a mere 2.5% off its peak. Thursday's surge turned the stock higher at a pivotal old resistance zone that has now become strong support; $105 is the new line in the sand to watch for bulls. Provided we stay above it, the trend is higher.On the options trading front, traders came after calls throughout the session. Activity swelled to 363% of the average daily volume, with 137,803 total contracts traded. Calls accounted for 57% of the take.The options market was pricing in an earnings gap of $5 or 4.7%, so the 6% jump exceeded expectations, bringing profits to long volatility positions. The post-earnings volatility crush was on full display with a drop to 23% or the 48th percentile of its one-year range. Canopy Growth (CGC)Traders fled Canopy Growth in droves Thursday after the Canadian-based cannabis producer revealed terrible first-quarter numbers. The departure resulted in a 14.4% loss on one of its highest volume trading sessions in months. This year's gains have now all but unwound.At one point, the high-flying pot stock was up almost 100%. Now it's virtually unchanged for 2019. Revenue fell compared to the prior quarter to 90.5 Canadian dollars and came in over CA$20 million below estimates. The drop in sales resulted in an overall loss of $1.28 billion.CGC stock was already on a bearish trajectory, but its descent accelerated in a big way. The next stop is $25.26, which hosts a significant support zone. Expect the weak earnings to weigh on the stock for the coming quarter. Rallies are suspect, and bear trades are the way to go.On the options trading front, calls and puts proved almost equally popular. Total activity grew to 270% of the average daily volume, with 84,871 contracts traded. Calls slightly edged out puts with 52% of the sum.The options board was pricing in a 9% move on earnings, so the initial gap was on target, but selling throughout the day pushed CGC well past expectations at -14%. Like WMT, volatility buyers came out winners for CGC. * 7 Education Stocks to Buy for the Future of Academia Beyond Meat (BYND)The inevitable and long-awaited reality check has arrived for Beyond Meat shares. Yesterday's 11.5% thrashing marked the first time BYND stock has broken support since its mid-year IPO. Essentially, this is the first time buyers failed to defend their turf and it marks a decisive change in character.Skeptics have long predicted the bloom would come off the rose given the insane valuation levels the company has been driven to during its nearly 700% moonshot. This week, these prophets finally get to have their day in the sun. With BYND now below the 50-day moving average, I suggest caution to any would-be buyers. The technical picture is now ugly and indicates the path of least resistance has shifted from higher to lower.Traders favored puts alongside the stock beatdown. Activity climbed to 139% of the average daily volume, with 262,312 total contracts traded; 56% of the total came from puts.As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Friday's Vital Data: Walmart, Canopy Growth and Beyond Meat appeared first on InvestorPlace.

  • MarketWatch

    Canopy Growth may have lost its lead in Canadian recreational cannabis: GMP

    Canopy Growth Corp. seems to have lost its market lead in adult-use cannabis in Canada, GMP Securities said Friday. Analyst Ryan Macdonell slashed his stock price target to C$45 from C$65, after the company reported earnings for its fiscal first quarter that were mostly below expectations. But the company's setting aside of a C$6.4 million provision against oil and gelcaps being returned due to oversupply may be a company-specific problem, said Macdonell. The analyst calculated that 23% of the company's third-quarter and 50% of its fourth-quarter recreational market volumes were extract products, while extracts accounted for an average of 7% of the sell-through volume in the recreational market since inception. "We are decreasing our price target as the lacklustre performance in recreational market sales could indicate that Canopy has lost the leading position," he wrote in a note. "We remain positive on WEED over the long-term as we expect the company is well prepared for cannabis 2.0.," he said, referring to the launch of new formats including edibles later this year. Canopy shares were up 2% premarket, but have fallen 17% this week and 39% in three months. The ETFMG Alternative Harvest ETF has fallen 24% in the last three months, while the S&P 500 has lost 1%.

  • Canopy Growth Corp. (CGC) Q1 2020 Earnings Call Transcript
    Motley Fool

    Canopy Growth Corp. (CGC) Q1 2020 Earnings Call Transcript

    CGC earnings call for the period ending June 30, 2019.

  • InvestorPlace

    After Sliding into Mediocrity, Tilray Stock May Be a Buy on This Dip

    A slew of recent earnings reports across the cannabis sector, from Canopy Growth (NYSE:CGC) to Tilray (NASDAQ:TLRY), have confirmed an overwhelmingly bearish reality for cannabis companies: these companies are going to lose hundreds of millions, if not billions, of dollars before they ever net a profit. Tilray stock still is less than half of what it was at the beginning of the year.Source: Shutterstock Investors are finally starting to grasp this reality, and it's making them second-guess the premium valuations they have been awarding pot stocks.As such, over the past few months, all pot stocks have been killed. Canopy, Tilray, Aurora (NYSE:ACB), and Cronos (NASDAQ:CRON) all presently trade more than 40% off their 2019 highs.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut, this isn't the end of the road for pot stocks. Instead, this is just a road-bump. Long term investors should consider strategically adding on this weakness. When doing so, the names to buy are sector giants CGC and ACB, and also rising cannabis star TLRY.Here's why. Pot Stocks Will Bounce BackIn the big picture, the long term bull thesis underlying the cannabis sector and high-quality pot stocks remains intact. The cannabis sector promises to be huge one day. * 10 Stocks Under $5 to Buy for Fall Current consumption trends indicate that cannabis is nearly as widely used as alcohol, and far more widely used than tobacco and that recreational cannabis usage is on a secular uptrend, while alcohol and tobacco usage are on secular downtrends.The implication is that once legal, the global cannabis market will be nearly as big as the global alcohol and tobacco markets. Those are several hundred billion- to trillion-dollar markets. Most estimates from research firms and cannabis companies put the global cannabis market at roughly $200 billion in size within the next 10 to 15 years. Thus, the revenue growth potential here is tremendous.So is the profit growth potential. Sure, margins are getting killed across the whole industry today. But, that's just what happens when you are less than a year into a new growth market. Everyone is expanding. Everyone is trying to win market share, grow reach, produce more supply, so on and so forth.Essentially, that means no one is really concerned about margins today. Everyone is just investing big to position themselves optimally for long term growth.In the long run, all this aggressive investment will simmer down. As it does, this industry will consolidate around a few large players, and start to look very much like the global alcohol industry. In that industry, the big players operate at around 25%-plus operating margins. That's where cannabis companies will operate one day.The math here is simple then. A 5% player in a $200 billion market operating at 25% operating margins should produce around $2 billion in net profits (assuming a 20% tax rate). A market average 16 forward multiple on that implies a long term valuation target of over $30 billion.No pot stock today features a market cap above $10 billion. Thus, across the board, the long term upside potential in pot stocks from these depressed levels looks compelling. Tilray Stock Has Turned into a Rising StarOne pot stock which has caught my eye recently is TLRY.I've always written off Tilray stock as one that got way too hot back in late 2018 (it went from $20 to $300 seemingly overnight) and didn't have enough size, growth, or backing to warrant its premium valuation.That was true for a long time. Until recently when Tilray reported impressive second-quarter numbers that showed that this company is turning into a rising star in the Canadian cannabis market.Here are the numbers. The Canadian cannabis market became legal in the last few months of 2018. In that quarter, Canopy sold over 10,000 kilograms of cannabis and Tilray sold just over 2,000 kilograms of cannabis.Fast forward three quarters. Last quarter, Canopy sold just over 10,500 kilograms of cannabis, up a meager 4% from its late 2018 volume total. Tilray, on the other hand, sold over 5,500 kilograms of cannabis last quarter, up nearly three-fold from its late 2018 volume total.In other words, while Tilray still isn't the big fish in the Canadian cannabis market, its the fastest-growing fish. That alone makes Tilray stock interesting on this dip.At the same time, Tilray's gross margins have actually improved sequentially over the past three quarters, while gross margins at other cannabis companies have declined over the past three quarters. Thus, not only is Tilray the fastest-growing fish here, but it's growing quickly while simultaneously improving margins.Overall, then, Tilray stock is starting to look tasty on this dip. The stock is being sold off with the rest of the sector. But, the internals here are exceptionally favorable. That disconnect makes for a compelling "buy the dip" opportunity. Bottom Line on Tilray StockPot stocks will remain exceptionally volatile for the foreseeable future. But, in the long run, this volatility is ultimately just noise. Long term investors should look to strategically buy into major weakness.One pot stock that looks particularly attractive amid the recent sell-off is TLRY. While other cannabis companies are struggling with growth or margins, Tilray is firing on all cylinders on both fronts. Thus, the recent sell-off in TLRY stock doesn't make much sense relative to its internals. That disconnect is an opportunity.As of this writing, Luke Lango was long CGC, ACB, and TLRY. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post After Sliding into Mediocrity, Tilray Stock May Be a Buy on This Dip appeared first on InvestorPlace.

  • Canopy Growth Earnings Impacted the Cannabis Sector
    Market Realist

    Canopy Growth Earnings Impacted the Cannabis Sector

    Canopy Growth’s weak results weighed on the entire cannabis sector. Most of the cannabis stocks were in the red on Thursday.

  • Bruce Linton Bought More Canopy Growth Stock
    Market Realist

    Bruce Linton Bought More Canopy Growth Stock

    Canopy Growth's ex-CEO, Bruce Linton, increased his investment in the company. Linton stated that he's still positive about the company's future.

  • Motley Fool

    How Did Canopy Growth Bungle Things So Badly in Q1?

    There are two possible answers. And neither one of them is good.

  • CNW Group

    /R E P E A T -- From Revolution to Evolution: Cannabis Culture 50 years later/

    Now, 50 years later, the crowd that started it all has become one of the most important, influential and educated consumer groups in the legal cannabis market—the 55+ Boomers. "Over the past two months, Tweed has worked with market research firm, Leger, polling the Boomer generation for their opinions on cannabis pre and post-legalization in regards to education, community and the future of the consumer landscape," says Rade Kovacevic, President of Canopy Growth Corporation. "This is a demographic with an incredibly unique viewpoint that has experienced and observed the cannabis industry's transition from prohibition to legalization over the past 50 years.

  • /R E P E A T -- Media Advisory - Canopy Growth to donate $100,000 to Forest Ontario to help plant millions of trees/
    CNW Group

    /R E P E A T -- Media Advisory - Canopy Growth to donate $100,000 to Forest Ontario to help plant millions of trees/

    /R E P E A T -- Media Advisory - Canopy Growth to donate $100,000 to Forest Ontario to help plant millions of trees/

  • PR Newswire

    Canopy Rivers' thriving ecosystem demonstrated by purchase and supply agreement between portfolio companies

    TORONTO, Aug.15, 2019 /PRNewswire/ - Canopy Rivers Inc. ("Canopy Rivers" or the "Company") (RIV.V) (CNPOF) is pleased to share that its portfolio companies, James E. Wagner Cultivation Corporation ("JWC") (JWCA.V) (JWCAF) and TerrAscend Corp. ("TerrAscend") (TER.CN) (TRSSF), have entered into a purchase and supply agreement, demonstrating the type of collaboration and synergy seen throughout the Canopy Rivers ecosystem. As part of the agreement, JWC will supply cannabis flower and oils to TerrAscend, which will be made available for purchase on TerrAscend's online medical sales platform, Solace Health, providing JWC with exposure to thousands of registered medical patients across Canada.

  • CNW Group

    From Revolution to Evolution: Cannabis Culture 50 years later

    Now, 50 years later, the crowd that started it all has become one of the most important, influential and educated consumer groups in the legal cannabis market—the 55+ Boomers. "Over the past two months, Tweed has worked with market research firm, Leger, polling the Boomer generation for their opinions on cannabis pre and post-legalization in regards to education, community and the future of the consumer landscape," says Rade Kovacevic, President of Canopy Growth Corporation. "This is a demographic with an incredibly unique viewpoint that has experienced and observed the cannabis industry's transition from prohibition to legalization over the past 50 years.

  • Motley Fool

    Why Tapestry, General Electric, and Canopy Growth Slumped Today

    Bad news for all three companies led to big losses.

  • Aurora Cannabis Is Upsizing Its Secured Credit Facility
    Market Realist

    Aurora Cannabis Is Upsizing Its Secured Credit Facility

    Aurora Cannabis (ACB) announced that it's increasing its secured credit facility to 360 million Canadian dollars from $200 million Canadian dollars.

  • TipRanks

    Canopy Growth (CGC) Stock Suffers from Identity Crisis

    It was clear and obvious at the time of the firing of Canopy Growth (CGC) co-CEO Bruce Linton, that Constellation Brands wanted the company to start to move toward lowering costs and widening margins. At the time I noted that this would inevitably cause the revenue of the company to decline, and that was confirmed in its latest earnings report.Even so, the size of the miss for revenue was deeper than I was thinking, and it doesn't bode well for the earnings trajectory of the company when it not only failed to increase sales of oil and softgels, but experienced a disappointing decline in revenue in those important product categories. I'm far more concerned about that than the one-off adjustment it made in relationship to warrants held by Constellation Brands, associated with Canopy Growth buying the rights to acquire U.S.-based Acreage Holdings.That's exasperated by its unfavorable product mix that is heavily weighted to low-margin recreational pot sold in Canada.Unsurprisingly, investor sentiment is very negative, with individual portfolios in the TipRanks database showing a net pullback from CGC.Some Nasty NumbersThe biggest disappointment and surprise in the earnings report of Canopy Growth was its failure to even match the revenue generated in the prior quarter, which also fell short of expectations. Net revenue of C$90.5 million was 4 percent lower sequentially. The market was expecting an increase of 17 percent for the quarter against the previous quarter.Of that, C$60.8 million of that came from the Canadian dried cannabis recreational pot market, which is a low-margin product. It needs to improve its product mix going forward in order to boost sales while widening margins. If it doesn't accomplish that, it's going to decline far faster than I think it will as the company stands today.One bright spot in revenue was with medical cannabis sales at the international level, where the company managed to boost net sales from C1.8 million in the previous quarter to C$10.5 million in the reporting period.On the other hand, the drop in oil and softgel revenue in the first quarter was staggering. It only managed to sell C$0.2 million in the quarter, significantly down from oil and softgel revenue of C$36.5 million in its fiscal fourth quarter.Part of that was the result of the company making an adjustment concerning oils and softgels estimated product returns, but that was only part of the reason for the decline.Another concern I have in regard to revenue is the company saying it was the consequence of supply restraints, and yet Aphria (APHA), Cronos (CRON) and Aurora Cannabis (ACB) don't appear to have been hindered by that in the Canadian market to the same level Canopy Growth was. In the case of Aurora Cannabis, I'm assuming its unaudited numbers it released are close to its actual results, as it won't be reporting until September.Gross margin in the quarter was also dismal, finishing at 15 percent, not even reaching the 16 percent in the prior quarter. Analysts were looking for close to 23 percent.According to management, the weak gross margin was primarily from C$16.2 million in operating costs associated with production facilities that weren't fully operational in the quarter.The other factor was the aforementioned disastrous decline in oil and softgel sales, which would have offset some of the low margins related to dry cannabis sales.ConclusionAfter the last couple of weak earnings reports and the debacle surrounding the firing of Bruce Linton, it's apparent to me that Canopy Growth is struggling to find its identity and the way to go forward.One of the obvious problems to me in the timing of firing Linton was Constellation Brands had nothing in place to replace his vision for growth. That points to there being more problems than are visible to those on the outside. That's why the numbers are bad, even when accounting for adjustments.For that reason, the assertion by its CEO that it will have an annual revenue run rate of C$1 billion has to be taken with a healthy grain of salt, as the company is going in the wrong direction, and even with it saying CBD and derivative sales should climb in the quarters ahead, it's hard to believe it's going to find a way to generate C$250 million in quarterly sales anytime soon.That said, it can't do much worse in softgels and oils, so there's really nowhere to go but up, yet the company pointing to weaknesses in demand in the Canadian market against supply, means it'll have to rely heavily on other products to reach its revenue guidance. It don't see that happening within the time frame the company stated.Investors also have to remember that expectations are there will be a new CEO put in place that is officially approved of by Constellation Brands, which is now essentially in control of Canopy Growth.How that transition plays out is yet to be determined, and if the new CEO continues on with the strategy being implemented at this time, why is there a need for a new CEO, if that's how it works out?The truth is, there needs to be a new CEO hired sooner rather than later. As the company stands today, there won't be a sense of stability until that happens. And when it happens, I for one want to know what the real reason for changing management was, and if it is concerning growth as has been stated, than what is the difference in the type of growth instituted by Linton, and the type of growth Constellation Brands wants?I think the state of flux the company is in now will continue to hinder it from reaching its potential, and if things keep on going as they are, it's going to take a long time for the company to dig itself out of the hole it's now in.

  • Marijuana Stocks Rout Continues As Canopy Growth Loses Market Share
    Investor's Business Daily

    Marijuana Stocks Rout Continues As Canopy Growth Loses Market Share

    Canopy Growth said its pot shops could open in the U.S. this fiscal year. But shares plunged on a big loss and falling market share. Other marijuana stocks sold off.

  • Benzinga

    Acreage CEO Kevin Murphy: 'There's No Greater Privilege Than Enriching The Lives Of Others'

    In a surprise appearance, Acreage Holdings (OTC: ACRGF ) CEO Kevin Murphy popped in at the Benzinga Cannabis Capital Conference in Detroit on Thursday. He emphasized the excitement of the space as regulatory ...

  • Canopy Growth needs another 3-5 years to turn profit

    Canopy Growth needs another 3-5 years to turn profit

    U.S.-listed shares of Canopy fell as much as 14.5% to $27.30, a day after the company reported disappointing quarterly results. As marijuana companies spend heavily, investors have been worried about their ability to post a profit, even as their top lines surge. Canopy posted a C$1.2 billion loss and lower-than-expected sales for the first quarter, joining rivals Cronos Group and Tilray which recently reported wider quarterly losses.