Canopy Growth, which got a $4 billion investment from Corona maker Constellation, will not be profitable by fiscal 2022, according to a new analyst report:
Canopy Growth Corp., the Canadian cannabis company that is the market leader thanks to a $4 billion investment from a major drinks company, will not be profitable on a per-share basis by fiscal 2022, MKM analyst Bill Kirk said Friday.“Unlike market expectations, we do not expect Canopy to become a profitable organization by FY2022 ,” Kirk wrote in a note to clients. “Current spending is the beginning of what is needed to capture future profitable opportunities.
But the Smith Falls, Ontario-based company’s losses are also due to an excessive executive compensation policy, while inventory levels remain a risk if demand does not materialize or is delayed, he said. Kirk offered 10 questions he suggests analysts attending Canopy’s Dec. 3 investor meeting should ask as the company gears up for Cannabis 2.0, the name given to the launch of derivatives, including edibles and beverages in Canada:2. How much more labor do the 2.0 products require compared to the current portfolio?4. Why have your peers struggled to have a THC Beverage ready for 2.0?6. Compared to six months ago, have your plans for vape changed ?8.
The FDA is tasked with coming up with a set of rules for the substance, but said this week it can cause liver damage and other harm to the human body. The news is a blow to Canopy and peers, who were hoping CBD would provide an easy pathway into the U.S. market, which is expected over time to become the biggest cannabis market in the world.
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