Money: Future may be bright for Canopy Growth stock after its ugly Q2 results - - PressFrom - Canada
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Money Future may be bright for Canopy Growth stock after its ugly Q2 results

17:31  21 november  2019
17:31  21 november  2019 Source:   fool.com

Drake gets into the ‘cannabis wellness’ game

  Drake gets into the ‘cannabis wellness’ game Drake gets into the ‘cannabis wellness’ gameThe "In My Feelings" rapper is teaming up with Canopy Growth Corporation to launch a new "Cannabis wellness company." The new business is called the More Life Growth Company.

But Canopy Growth apparently didn't get the memo. The company reported its Q1 results after the market closed on Wednesday. Analysts were looking for Canopy Growth to post 17% quarter-over-quarter It then incorporated an estimate of future returns of CA million in gross revenue, which

Canopy Growth 's shares are plummeting after the cannabis company released its fiscal second quarter earnings report. Canopy Growth CEO Mark Zekulin joins Yahoo Finance’s Zack Guzman and Kristin Myers to discuss the company’s earnings Q 2 results and product outlook for 2020.

Editor’s note: The opinions in this article are the author’s, as published by our content partner, and do not necessarily represent the views of Microsoft News or Microsoft. Always check with your advisor or other experts before making investment and other financial changes.

Canopy Growth (NYSE: CGC) went from becoming one of the most popular Canadian marijuana stocks to one of the most maligned marijuana stocks in a matter of months. Much of this dramatic shift in investor sentiment was due to the company's mistakes, although some of it stemmed from issues affecting the rest of the cannabis industry.

The situation for Canopy only worsened after the cannabis producer's fiscal 2020 second-quarter results were announced on Nov. 14. Canopy lost nearly 29% of its market cap last week, and its shares are now down nearly 50% year to date.

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Canopy Growth 's stock was hardly a winner this week. Its price declined nearly 15% from Monday to Friday's close. Tilray has a mixed Q 2 . Tilray's freshly reported quarter was better than Canopy Growth 's -- but that isn't exactly a ringing endorsement of its performance. For its Q 2 of fiscal 2019

Find the latest CANOPY GROWTH CORPORATION (WEED.TO) stock quote, history, news and other vital Canopy Growth Analysts Lower Price Targets After Q 2 Report. Over the last 12 months, Canopy Growth Corp (NYSE: CGC) Canopy Growth Stock May Be Too Dangerous to Buy Now.

Some investors might think that Canopy Growth is a lost cause. But with the stock at its lowest point since late 2017, should you consider buying Canopy after its ugly Q2 results?

a close up of a handcart: Giant marijuana leaf in a shopping cart.© Getty Images Giant marijuana leaf in a shopping cart.

Near-term headwinds and tailwinds

One key argument against buying shares of Canopy Growth right now is that the headwinds impacting the stock throughout much of 2019 haven't yet died down. The biggest problem for the company is that it continues to lose a lot of money and doesn't appear to be on a path to profitability anytime soon.

The greatest industrywide headwind for Canadian cannabis producers -- the lack of adequate retail infrastructure, especially in Ontario -- won't be resolved in the near term, either. And international medical cannabis sales, while increasing, aren't growing fast enough to offset the challenges in the Canadian market.

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But Canopy Growth apparently didn't get the memo. The company reported its Q1 results after the market closed on Wednesday. Analysts were looking for Canopy Growth to post 17% quarter-over-quarter It then incorporated an estimate of future returns of CA million in gross revenue, which

And those results were ugly . Canopy reported that its net revenue in Q1 slipped nearly 4% from the previous quarter to 90.5 million in Canadian dollars. Sometimes the headline numbers aren't as bad as they might seem at first glance. For example, Canopy 's huge net loss stemmed primarily from a

However, there are reasons to hope for improvement over the next several months. Canopy Growth CFO Mike Lee said in the company's Q2 conference call that Canopy is "coming off of a major phase of investment from Canada, and we are literally in the final stages of that and paying bills on the last part of it." This lower level of capital expenditures should improve Canopy's bottom-line performance.

Ontario plans to issue more licenses for retail stores, a move that should help Canopy Growth significantly. The company is even planning on a rollout of 40 new stores per month beginning in January. Even if that's an overly optimistic projection, Canopy should soon enjoy a solid catalyst.

Don't forget the cannabis derivatives market that's about to be in full swing. Canopy is launching over 30 new products, with another 20 or more products coming in 2020, including beverages, edibles, and vapes. It remains to be seen how successful these new products will be, but the company should see a nice bump in sales next year.

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Canopy Growth 's stock was hardly a winner this week. Its price declined nearly 15% from Monday to Friday's close. For its Q 2 of fiscal 2019, Tilray saw the more-or-less expected pop in revenue, which rose over four times on Canopy Growth Stock May Be Too Dangerous to Buy Now. InvestorPlace.

Such a move would be good for Canopy Growth (NYSE:CGC), CGC stock and most importantly, the president's. Tip: Try a valid symbol or a specific company name for relevant results . As you might be aware, Canopy has a tentative deal in place to buy Acreage Holdings for .4 billion, but only if

Canopy Growth is also preparing to launch CBD products in the U.S., another potential growth driver. CEO Mark Zekulin said in the company's Q2 conference call that Canopy expects to launch new CBD products in the U.S. market "before the end of this fiscal year," or by March 31, 2020.

Long-term prospects

Over the long run, Canopy Growth's growth will come outside of Canada. That's why the company's early forays into international markets are extremely important.

The big prize, of course, is the U.S. marijuana market. Canopy Growth is arguably the best-positioned Canadian cannabis producer to jump into this market when federal laws permit. It already has hemp CBD operations. The deal to acquire Acreage Holdings gives Canopy a vehicle to immediately move into the U.S. marijuana market should the legal environment change. Canopy also has a partner, Constellation Brands, with an extensive retail distribution network within the U.S.

When will U.S. federal marijuana laws change? No one knows for sure. Public support and political support have grown tremendously for marijuana legalization. Bills have been proposed in both houses of the U.S. Congress to change federal laws. However, the political process can move very slowly. It seems likely that U.S. federal laws will at least be revised to recognize the rights of states to make their own decisions on marijuana legalization at some point over the next several years -- but how many years that will be is a complete guess.

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Secondly, Canopy 's growth strategy hinges on expansion into considerably larger markets than Canada. Though Linton viewed this expansion as necessary for Canopy to reach its long-term goals and industry dominance, it ' s ravaged Canopy Growth Stock May Be Too Dangerous to Buy Now.

The largest marijuana stock in the world by market cap doesn't look like a leader following its fiscal Q1 results .

The global legal cannabis market should generate sales of $100 billion and perhaps much more over time. Despite its current problems, Canopy Growth should be able to capture a significant share of this market.

Is the stock a buy?

Some questions require nuanced answers. The question as to whether or not to buy Canopy Growth is one of them.

If you're a risk-averse investor, Canopy Growth isn't a good pick for you. The stock is likely to be very volatile for a long time to come.

However, if you're an aggressive investor who's willing to sit tight for several years in the midst of tremendous volatility, I think buying a small stake in Canopy Growth could pay off. My view is that Canopy's financial performance will improve significantly over the next couple of years. And I think the company will be worth a lot more than its current market cap over the long term.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Brands. The Motley Fool has a disclosure policy.

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CGC Stock Falls (Again) After Its Earnings. There are several reasons why Canopy Growth stock has steadily Cannabis companies’ long-term profit margins may be lower than expected. Canopy Growth – and the industry as a whole – need to answer key questions before investors can become

Shares of Canopy Growth Corp (NYSE:CGC) remain volatile, which comes as little surprise for investors. While CGC may be one of the more tame names among cannabis stocks , the industry is no stranger to volatility.

And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.

Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.

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