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- Legitimate Cannabis is in Demand Again: Canopy Growth
Legitimate Cannabis is in Demand Again: Canopy Growth
Canopy Growth stocks were the most popular before marijuana became legal in Canada. However, after weak financial results performed for a long period of time, CGC prices returned to where they were at the end of 2018. The company’s latest earning report for Q3 2022 provided mixed impressions as revenues were down by 10% year-on-year to $117.9 million, while gross margin was up to 10% from -52%. Cash and cash equivalents were down by 42% year-on-year to $1.1 billion. The amount of cash decreased dramatically as the company is heavily investing in its business in the United States, where it has greater potential than Canada. The company’s management sees this expansion as once in a lifetime opportunity and is willing to bet everything on the U.S. in its effort to consolidate its operations. CGS is trying to get control of its existing businesses in the U.S. where it already has a share of the market: Jetty Extracts (vaping), Wana Brands (a maker of marijuana-infused edibles) and Acreage (a multi-state operator).
Biosteel sport beverages, that are distributed via Walmart and delivered sales up by 299% year-on-year during the reporting quarter, is the only profitable segment for CGS. This is not the best result for a company that specialises in recreational cannabis production. Investors seem to appreciate management’s efforts to risk everything for expansion in the U.S., but the future of the company is entirely dependent on this venture.
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