Where Will Canopy Growth Be in 1 Year?
Canopy Growth (NYSE: CGC) is a well-known Canadian marijuana company, boasting the highest market cap in its sector at $5.96 billion. Canopy Growth grabbed investor attention (and a boost in cash) when it partnered with beverage company Constellation Brands (NYSE: STZ) in Oct. 2017. Constellation invested 245 million Canadian dollars in Canopy in the initial deal and has been increasing its stake ever since, a show of faith in Canopy Growth's potential.
But the deal also brought bad news in the form of CEO Bruce Linton's termination. Constellation Brands had been unhappy with Canopy's constant losses, leading to Linton's firing in July 2019. A sudden C-suite leadership shakeup doesn't sit well with investors, and ultimately took a toll on Canopy's stock price. Shares declined 21.5% in 2019, compared to Horizons Marijuana Life Sciences ETF's decline of 36%. Last year's market headwinds didn't show Canopy mercy either. Challenges to the legal Canadian cannabis industry included a prevalent illicit market and regulatory delays, resulting in the opening of fewer legal storefronts.
While the company has reported rising revenue this year, its profitability is still in question. Let's try to predict what Canopy will look like one year from now based on where it's been.
Source Fool.com
