
TSE:WEED
This summary was created by AI, based on 1 opinions in the last 12 months.
Experts are expressing significant skepticism regarding Canopy Growth Corp. and the overall cannabis industry. One expert highlights that the company has demonstrated weak returns on capital, indicating that investments made might not be yielding the expected benefits. The concern is compounded by the perception that there has been excessive capital invested within the sector, which has resulted in substantial losses. Furthermore, there is a call for major consolidation within the industry, pointing to the belief that the current landscape is oversaturated and inefficient. Improvements in regulation are also deemed necessary for the growth and stabilization of the market, suggesting that the current environment is not conducive for investor confidence.
These stocks had run up a tremendous amount. The valuation is insane. A lot of speculation in this space. The corporate governance in this space is not strong. For any investors that have made money in this space, should be taking profits now. It’s likely natural that they will pull back now that is legalized. He does not own companies in this space.
Canopy Growth (WEED-T) vs Aurora Cannabis (ACB-T) The battle of the titans. Both companies do good things. He favors Canopy as it has a lower risk diversified growth strategy in 12 different facilities. He also likes the deal with Constellation for further diversification. Aurora is expected to grow with the expansion of the new facility near Edmonton, but he wonders if the growth will be staged and may be slower than people expect. Canopy also has an advantage given its size of existing product inventory.
He's avoided the weed space, because cannabis producers--being commodity producers--have very low profit margins. This is a gold rush now. Some companies will survive, but some won't. There are legalization challenges, especially about edibles. Canopy will survive, because Constellatioon Brands is its major backer, but doubts it can maintain its stock levels. Right now, cannabis is a total crap shoot, though Canopy is one of the strongest of the pack.