[ad_1]
Canadian producer of marijuana Cover growth (CGC) may not have enough stored grass to keep its grip on nearly a third of the country's legal cannabis market, GMP Securities said in its statement. The stock of Canopy Growth fell, while other marijuana stocks were mixed in morning trading.
X
GMP Securities analyst Martin Landry said Tuesday in a research note that he was concerned about declining inventory levels of Canopy Growth, saying that they could "hurt his ability to support its growth in the short term ".
"In our opinion, Canopy's competitors could catch up with better stock availability and large capacity expansion projects, which could lead to a decline in market share," he said. did he declare.
He also said that Canopy Growth should "better articulate its path to profitability" as selling, general and administrative costs were higher than sales. The strong growth in Canopy Growth's inventory in the Canadian market reflects high sales expectations, although the company's international outlook remains uncertain, he said.
"This impressive performance is justified given the company's leading role in the global cannabis industry," wrote Landry. "However, given the concerns expressed above, we believe that WEED's actions may require a break before the next step."
Landry demoted the Canopy Growth stock. He also lowered his Canopy Growth stock target to $ 65 instead of $ 70.
Forest cover growth, marijuana stocks
Canopy Growth shares fell 3% to 46.14 today. Shares are in a very deep cup base – 57% – with a purchase point of 51.91 handle. Eruptions of bases deeper than 40% are less likely to work.
Of the other marijuana stocks, Cronos Group (CRON) increased by 2.5%. Landry downgraded the Cronos group's shares earlier this month, citing a sharp rise since December on "no big news".
Aurora Cannabis (ACB) plunged 0.6% in Tuesday's stock market. Aurora remains the highest ranked Canadian registered marijuana stock in the United States. He has a composite score of 95 out of 99. But his 50-day line has crossed his 200-day mark, a bearish signal.
Tilray (TLRY) was up 0.2%. Aphria (APHA) gained 1.25%.
Inventories fall
Canopy Growth released its third quarter financial results on Friday. The quarter included the three months ending December 30, as well as the first two and a half months of legalization of leisure. The company reported having finished goods valued at C $ 22 million during the quarter. That's 56 million Canadian dollars in the previous quarter.
Landry also stated that Canopy dried pea stocks fell during this period in Ontario, Quebec and Alberta, three of the most populous provinces in Canada. Its analysis does not include oil and capsule capsules, which account for 30% of Canopy sales in the third quarter.
These sales were helped by high prices, said Landry. However, the company sold fewer kilograms of recreational pot than it expected. Canopy's decision to absorb an excise tax on marijuana for medical purposes also hurt margins.
Some industry leaders say the global market for medical marijuana is the biggest selling opportunity. But Landry noted that the market remains small for the moment. Although Canopy Growth has a license to produce hemp in the state of New York, it will take even more regulatory dominos for the marijuana industry to move with certainty.
"Global cannabis sales, excluding North America, are still low and Canopy has only generated $ 2.7 million in the last quarter," Landry said. He added: "The deployment of capital in the United States is a potential catalyst but depends on regulatory changes, for which visibility is limited and delays likely"
YOU COULD ALSO LIKE:
Weed will touch the malls while a luxury retailer will sell $ 13,000 gold pipes
Marijuana stocks to buy and watch
Which stocks are the fastest growing companies today?
7 Best Stocks with Bullish Charts Ready to Earn Revenues
Watch all the educational videos of the JIB on YouTube
[ad_2]
Source link