Why Canopy Growth Just Became a Great Buy
As well as Canopy Growth (NYSE: CGC) has grown over the years, it has struggled to stay out of the red, burning through a lot of cash along the way. And that's why it's not surprising that shares of this top pot stock are down around 70% over the past year, which is only marginally better than the Horizons Marijuana Life Science ETF's 72% decline during the same time frame. There's been a lot of change happening at the company. In March, Canopy Growth announced that it would cut 500 jobs, and in April it said it would be shutting down its growing facility in Yorkton, Saskatchewan. The company's biggest move came nearly a year ago when it fired CEO Bruce Linton.
However, there's reason to be bullish on Canopy Growth's stock, and it's not only because it's so much cheaper than it was a year ago. The company's making moves that should set it up for better results in the future, and that could make the stock a very appealing investment today.
On April 16, Canopy Growth announced that it would be scaling back its presence around the world. In Africa, the cannabis producer will be exiting its operations in South Africa and Lesotho. And while it's staying in Latin America, the company will shut down its cultivation facility in Colombia and said that it would be "moving to an asset-light model that leverages local suppliers for raw materials." Even in the U.S. market, Canopy Growth is going to cease farming operations in Springfield, New York as it says it produced more than enough hemp in 2019. While Canopy's not exiting the U.S., it's also not going to continue stockpiling hemp.
Source Fool.com
