Will Canopy Growth Post a Profit in 2020?
One of the big reasons Canopy Growth (NYSE: CGC) and other pot stocks have struggled so mightily over the past year is because of a lack of profitability in the sector. Losses, whether due to impairment or declining fair value, are the norm in the industry, which cannabis investors know is still growing and full of risk.
But for an industry leader like Canopy Growth, the clock is ticking to get to a more sustainable income statement. And now that it's got a new CEO, David Klein -- who's been brought over from the pot producer's key investor, beverage giant Constellation Brands (NYSE: STZ) -- there's even more pressure on the company to produce much better results in the near future. Let's take a look at the company's financials and assess whether profitability is likely in 2020.
There was a lot of noise around Canopy Growth's fourth-quarter results, which the company released back on May 29. Canopy Growth incurred significant restructuring and impairment charges of 743 million Canadian dollars. The pot producer says that without such one-time charges, its adjusted gross margin would've come in at 42%, rather than the negative 85% that it reported in Q4.
Source Fool.com
