Canopy Growth's Stock Likely Hasn't Bottomed Out Just Yet
Canopy Growth (NASDAQ: CGC) has lost more than 95% of its value in just the past three years. To say that the Canadian cannabis stock has struggled would be a huge understatement. But investors also should be careful not to assume that simply because it has declined so much that it can't go lower. Here are a few reasons the pot stock could still sink further.
A notable development that investors shouldn't overlook this month is news that alcoholic-beverage maker Constellation Brands has allowed its warrants in Canopy Growth expire. The company could have taken a larger stake in the cannabis producer but opted not to; the warrants represented 16.9% of Canopy Growth's common stock outstanding.
Constellation Brands invested $4 billion in Canopy Growth back in 2018, when it was more optimistic about the state of the cannabis industry. Today, however, with Canopy Growth often dragging down Constellation's earnings numbers, it looks to be distancing itself from the struggling pot producer. What may be even more concerning for Canopy Growth investors is that Constellation also states that it "has no other present plans or future intentions that relate to Canopy."
Source Fool.com
