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Cannabis Summary for Nov. 14, 2019

2019-11-14 20:07 ET - Market Summary

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by Stockwatch Business Reporter

The Canadian Securities Exchange Composite Index fell 5.9 points to 395.86 Thursday. Canopy Growth Corp. (WEED) sank $3.49 to $20.96 on 9.19 million shares after the company reported its fiscal second quarter results for the quarter ended Sept. 30, 2019. Canopy had net revenue of just $76.6-million in Q2, down significantly from $90.4-million in the quarter before. The quarter-over-quarter slip was exacerbated by charges the company took with respect to its struggling softgel and oil business. Specifically, Canopy took charges of $32.7-million for returns, returns provisions and pricing allowances that the company said was primarily related to softgels and oils.

Piper Jaffray analyst Michael Lavery believes the legalization of edibles, vaporizers and beverages could be responsible for the fading popularity of softgels and oils. "We believe the apparent lack of consumer interest in these products highlights the importance of the second wave of product forms, coming in December/January, which have had more proven consumer demand in U.S. markets," Mr. Lavery said in a note on Thursday. As Mr. Lavery alludes to, Canopy's edible, vape and beverage products will likely be available at some point in December or January. The company has submitted 30 products to Health Canada for approval; the federal regulator requires a 60-day period of notice before companies are eligible to start selling the above products.

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