Shares of Canopy Growth (NYSE:CGC) (TSE:WEED) jumped today after the firm announced that it’s streamlining its business, shedding nearly all of BioSteel Canada and BioSteel Manufacturing’s assets following a green light from the court. This move is a strategic shift to sharpen the company’s focus on its core cannabis business and adopt a leaner operational model. The sale, approved by the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act, is a result of a rigorous bid process managed by court-appointed KSV Restructuring Inc.
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Canopy Growth, being BioSteel Canada’s main creditor and shareholder, expects these sales to beef up its financials. The Canadian deal will sell off most assets but hold back some inventory, receivables, and contracts, including key intellectual properties. The U.S. deal will offload nearly all assets, pending lease transfer approvals and the U.S. Bankruptcy Court’s nod. Canopy Growth’s CFO, Judy Hong, is optimistic about the financial benefit of halting BioSteel’s funding and its sale proceeds.
Is CGC Worth Investing In?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on CGC stock based on three Holds and five Sells assigned in the past three months, as indicated by the graphic below. After an 85% decline in its share price over the past year, the average CGC price target of $0.59 per share implies only 6.36% upside potential.
