Shares of Canopy Growth (NYSE:CGC), (TSX:WEED) closed yesterday slightly above the height they reached last week when the largest cannabis company on the globe announced its latest quarterly earnings.
The moves from here will be closely watched, as Canopy Growth is still considered a bellwether stock for the cannabis sector. The closing share price on Nov. 16 of CA$32.435 (US$24.77) are the highest levels reached in 2020. If they go higher, will that be the trajectory of a slow-but-steady trend?
Last week, Canopy reported better-than-expected results, posting C$135.3 (US$103.43) million in revenue for the three-month period that ended Sept. 30. That represented a 77% rise compared with the same quarter in the previous year. The company also reported a C$85.7 (US$65.51) million adjusted EBITDA loss. It incurred a C$94.7 (US$72.39) million loss on financial assets and posted C$46.3 (US$35.39) million in writedowns.
Among the significant highlights was CA$8 (US$6.12) million in revenue from cannabis 2.0 products. In Canopy’s case, this is mostly from cannabis-infused beverages. This segment was up about CA$2 (US$1.53) million from the previous quarter. This is also the area where observers are looking to see important growth.
As well, the company pointed to the launch of Martha Stewart branded CBD gummies, which hit markets in September.
What investors should continue to keep an eye on is how the major cannabis companies are positioned to take advantage of federal legalization in the U.S. Now, with about 70% of states having legalized marijuana and the Democrats preparing to take over the White House, the prospect for a federal green light on this long-awaited issue is coming into sharper focus.
And again, this would give Canopy a strategic advantage. It’s partnership with multi-state operator Acreage Holdings (OTC:ACRGF), (CSE:ACRGu) will be fully triggered as soon as federal legalization is realized. Already, Acreage has started to license many of Canopy’s retail products and brands for the U.S. market.
Canopy Moves U.S. Trading To NASDAQ
Shares of Canopy Growth began trading on the NASDAQ exchange in the U.S. on Monday, Nov. 16.
The move is part of a strategy of improving cost-effectiveness, according to the Canadian-based company.
"By making the move over to Nasdaq, we are joining some of the world's leading companies that share our passion and focus for innovation," said David Klein, Canopy Growth CEO.
"Making the transition to NASDAQ also provides us with greater cost-effectiveness and access to a suite of tools and services that will help us connect more efficiently with our current and future investors."