for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Company News

BUZZ-Canopy Growth's inventory build a concern for brokerages

(Updates shares)

** Shares of Canopy Growth Corp down ~13% at C$37.11 after weaker-than-expected Q1 revenue on lower recreational cannabis sales

** BMO Capital Markets (“market perform”, PT: C$60) cautious of plans to build inventory of cannabis beverages as it expects initial uptake to be muted by limited in-store shelf space

** “Headwinds likely to persist due to ramp up for value-add products”

** RBC Capital Markets (“sector perform”) sees implications of an inventory build as ultimately worse than expected; says this will likely take much of the Street off guard

** Expects narrower loss to be overshadowed by the considerable revenue shortfall and concerns over potential returns

** Eight Capital (“buy”, PT: C$70) says co’s quarterly harvest alone could service the vast majority of the quarterly demand in the Canadian market in its existing form

** Compass Point (“neutral”, $43) says with additional production capacity being added by large pot firms, overall cannabis pricing in Canada will continue to soften

** Also drags peers: Aphria Inc down 4%, Cronos Group drop ~7%, Hexo Corp down ~5%

** WEED up 1.3% YTD (Reporting By Arundhati Sarkar in Bengaluru)

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up