CGC - Canopy Growth resumes selloff after brief rally

2023-07-05 15:43:09 ET

Canadian cannabis player Canopy Growth Corporation ( NASDAQ: CGC ) resumed its monthslong selloff on Wednesday, falling ~21% after a brief uptick that coincided with sector-wide gains in the previous session.

Canadian Licensed Producers ((LPs)), including Tilray ( TLRY ), and U.S. Multi State Operators ((MSOs)), such as Trulieve Cannabis ( OTCQX:TCNNF ), were among notable gainers on Monday ahead of the Independence Day holiday in the U.S.

The fortunes have changed for Canadian LPs on Thursday, with Canopy ( CGC ) leading decliners on above-average volumes: 40.6M CGC shares have changed hands, compared to the 65-day average volume of ~10.9M.

Meanwhile, Eight Capital slashed its price target on Canopy ( CGC ) to C$0 from C$1.75, becoming the second Wall Street firm to assign a $0 per share target on CGC in less than two weeks.

"We believe it is no longer appropriate to value Canopy as a going concern, given our view that it has a) less than 12 months of cash runway, b) a lack of viable financing alternatives, and c) large ongoing losses without a clear path to profitability," said analyst Ty Collin.

Last week, Benchmark slashed its price target on CGC to $0 from $2 per share. Maintaining his Sell rating on the stock, the analyst, Mike Hickey, questioned the company’s ability to operate as a going concern due to its negative cash flow and declining revenues.

More on Canopy Growth

• Canopy Growth down 12% after Q4 FY23 results
• Canopy Growth: A Race Against Time As Going Concern Warning Shows Up

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