top of page
SA Landraces with Cannabis Plants. and species-min.png

CANNABIS INDUSTRY 

BREAKING  NEWS

Canada's Canopy Growth Burns Through Cash; Analysts Warn it May No Longer Be a Going Concern

Canada's Canopy Growth Burns Through Cash; Analysts Warn it May No Longer Be a Going Concern

Canada’s Canopy Growth was one of the early movers into the Lesotho cannabis space but exited in 2018, selling its assets to Highland Investments. Life hasn’t got any easier for the multinational which posted a C$648 million loss for the last quarter, raising doubts as to whether it will have the firepower to enter the US market, or even manage to stay afloat.

Cannabiz Africa

28 June 2023 at 12:00:00

Canopy Growth may no longer be a going concern. The cannabis multinational, once valued at C$19 billion, has suffered a 78% drop in its share price this year as it burnt through cash, It is now valued at C$400 million, but that is now in doubt.


Benchmark analyst Mike Hickey said in a note on Monday, 27 June 2023 that he now rated Canopy Growth stock at zero!


The company’s aggressive expansion into the US “could be a signal of desperation, given that the US market remains federally illegal,” he said.


READ: A South African perspective on the Canadian cannabis stock fiasco


Even if the US were to legalize marijuana, it would be “no saviour” for Canopy, which is burning cash despite multiple cost cutting programs,” CIBC Capital Markets analyst John Zamparo wrote in a separate note Sunday, 26 June 2023

.

Zamparo trimmed his price target on the stock to C$0.45 from C$0.50, writing that its “debt worries are no paranoia.”


On Tuesday 28 June 2023, auditing firm KPMG announced it was dropping Canopy Growth as a client as it "did not maintain effective internal control over financial reporting as of March 31, 2023." KPMG added that "an ineffective control environment, resulting from a lack of the required number of trained operational and IT personnel with the appropriate skills and knowledge and with appropriate assigned authorities, responsibilities and accountability related to the design, implementation and operating effectiveness of internal control over financial reporting.”


The company has hired PKFOD as its accountant for fiscal 2024.


READ: Bad Glut feeling: Canada destroyed 500 tons of legal cannabis since 2018.


Reuters reports that Canopy reported a net loss of C$648 million ($490.69 million) for the fourth-quarter ended 31 March 2023 from last year's C$589 million, hurt by impairment charges and restructuring costs.


The company's revenue also fell short of expectations due to weak results at its BioSteel unit, which produces sports nutrition products.


"Internally at Canopy, we faced executional challenges," Klein said.


Canopy said it identified certain trends in the booking of sales for BioSteel, leading it to launch an internal review. As a result of the review, Canopy said it has let go of several members of BioSteel's leadership team.


Once a multi-billion company, Canopy has seen its fortunes dwindling over the years and is now valued at just under C$400 million.


The company continues to double down on its efforts to turn profitable, including cost cuts through layoffs, exits from some international markets, store closures and divestiture of its retail business across Canada.


Cost reductions undertaken during the year were on track to reduce headcount by over 1,200 positions.


"Looking ahead, visibility remains limited," said Bernstein analyst Nadine Sarwat.


Sarwat added that Canopy was still burning through cash and including going concern risk in the filing makes Canopy USA's rationale unclear, as cash won't flow back to the U.S. unit without federal legalization.


Canopy is eyeing an entry into the U.S. cannabis market through Canopy USA.

#

Juicy Fields Saga Comes South: Private Russian Investigator Rescued From Rogue Police Extortion Web in Namibia

Afriplex emerging as the "go to guys" for all matters medical cannabis

Afriplex, CRI, Releaf Take The Lead in Ground-Breaking Medical Trial That Proves Cannabis Is Safer Alternative Than Opioids In Chronic Pain Treatment

Afriplex emerging as the "go to guys" for all matters medical cannabis

Parliament hears submissions from the public on the Cannabis For Private Purposes Bill

Justice Dept Says Soldiers Can Smoke Cannabis in Private Despite SANDF Concerns

Parliament hears submissions from the public on the Cannabis For Private Purposes Bill

5.cannabiz-africa Hemp -min.png

Cannabis in South Africa: The People’s Plant

We are a civil society organisation with the interests of the existing Cannabis industry and the Human Rights of ALL citizens at heart.

WE’RE BRINGING A NEW STANDARD

We are more than just a cannabis retail company. We are about a lifestyle that promotes vitality, balance & good health.

Resources & Equipment

Explore cannabis growing equipment for growing weed at home. 

Whether you’re just starting out, or you’re looking to enhance your outdoor or indoor weed grow setup – we have the perfect range of cannabis growing equipment to match your marijuana growing ambitions. 

Find everything from LED grow lights, grow tents, fans, and hydroponic setups, to environmental equipment and controls, harvesting accessories, extraction equipment and plenty more. 

Design your ideal cannabis growing setup with high quality growing equipment available in South Africa. 

Explore cannabis growing equipment we’ve curated from reliable online suppliers in South Africa

bottom of page