Pot stocks remain in a haze, but is the fog lifting?
Plunging selling prices for legal cannabis and related products amid a drop in consumer demand for pot-infused products sparked a wider-than-expected fiscal second-quarter loss for the Canadian cannabis product producer and distributor Canopy Growth (CGC) - Get Report .
The Smiths Falls, Ont.-based company posted a loss for the quarter ended Sept. 30 of C$374.6 million ($282.4 million), or C$1.08 a share, vs. a loss of C$330.6 million, or C$1.52 a share, in the year-earlier period. Revenue more than tripled to C$76.6 million from C$23.3 million, but still came in well below FactSet consensus estimates of C$90.6 million.
"The last two quarters have been challenging for the Canadian cannabis sector as provinces have reduced purchases to lower inventory levels, retail store openings have fallen short of expectations, and Cannabis 2.0 products are yet to come to market," CEO Mark Zekulin said in a statement.
Still, Zekulin believes the challenges impacting Canopy Growth and the marijuana sector as a whole are "a short-term headwind in what is a brand-new industry, and Canopy continues to be best positioned with cash-on-hand, a world-class infrastructure, and a portfolio of intellectual property to deliver sustained, long-term market leadership."
To be sure, Canopy Growth isn't the only marijuana company suffering from a lack of spark. Canadian competitor Tilray (TLRY) - Get Report on Wednesday posted a wider-than-expected third quarter loss - also at the hands of falling weed prices, which have halved in the world's first major market for legalized marijuana.
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