Canopy Growth’s Stock Declines Amid Share Sale Plans

LOS ANGELES- Canopy Growth Corporation’s stock declined by 9% to a historic low of $1.26 per share following the company’s announcement to issue up to $200 million in new shares. This move aims to bolster the company’s financial position for general corporate purposes, including debt repayment and potential acquisitions.​

The planned share sale is significant, considering Canopy Growth’s current market capitalization of approximately $240 million, effectively increasing the total value of its outstanding shares by nearly 83%. This development occurs despite a 1-for-10 reverse stock split implemented late last year to stabilize share prices.​

The company’s financial challenges are underscored by its recent third-quarter report, which revealed a net loss of C$121.9 million (US$85 million), an improvement from the previous year’s loss of C$216.8 million. Revenue decreased by 5% to C$74.76 million, slightly surpassing analyst expectations of C$69.1 million.

Canopy Growth continues to face profitability issues and intense competition within the Canadian cannabis market. While the company has investments in the U.S. cannabis sector through entities like Jetty Extracts, Wana Brands, and Acreage Holdings, investor sentiment remains cautious, partly due to stalled federal cannabis reform in the United States.​