The Canopy Growth Corp (NASDAQ: CGC) stock price rallied 13.1% during premarket trading after reporting a smaller Q3 loss of $67.4-million, compared to the over $162 million loss recorded in its fiscal Q2.
The lower losses were driven by significant cost cuts by the company in the past months and a massive overhaul of the company’s cannabis products portfolio.
The Canadian company postponed the target date by which it was expected to become profitable in November 2021, and many are waiting for the firm to issue a new date.
Furthermore, Canopy sold its German pharmaceutical unit last year after recording weak revenues due to the pandemic related restrictions.
The cannabis company also announced massive layoffs to return to profitability, while it generated revenues worth $141 million in the three months from October to December 2021.
Canopy Growth’s higher revenues were primarily driven by its US sports nutrition division known as BioSteel and its vape products sold under the Storz & Bickel brand.
The rally in Canopy growth’s shares also lifted other cannabis companies, including Sundial Growers, whose shares were up 8.76%.
On the other hand, Sundial Growers just received an extension from Nasdaq to meet its listing requirements or risk delisting from the exchange.
The company’s shares have been trading below the $1 threshold since late June 2021, and the firm got an extra 180 days to meet the listing requirements.
Rumors indicate that sundial Growers is considering a reverse stock split to raise its share price above the $1 limit within the next 180 days as cannabis stocks remain under pressure driven by the recent stock market selloff.
The prices at which cannabis stocks are trading now are far from the high valuations that characterised the cannabis markets during the 2018 boom and the 2020 rally that ended in early 2021.
While cannabis stocks may look attractive at current prices, we cannot say when the industry shall recover, given that cannabis stocks have been falling despite the companies taking measures to improve their operations and the cannabis market expanding.
*This is not investment advice. Always do your due diligence before making investment decisions.
Canopy Growth stock price.
Canopy Growth stock rallied 13.13% premarket to trade at $8.70, rising from Tuesday’s closing price of $7.69.
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Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading