The top brass of Canopy Growth (TSE:WEED) (NASDAQ:CGC) are looking for more consolidation to come in the near future. But this cannabis company might have done better to keep its mouth shut, as investors weren’t even slightly happy about this and left in droves, taking over 5% of Canopy Growth’s market cap with them.
The word from David Klein, CEO of Canopy Growth, is that the firm is doing “really good.” But he’s still expecting further shakeups in the broader industry, particularly considering how many companies are exiting the cannabis market. Klein noted that around 50% of filings with the Companies’ Creditors Arrangement Act (CCAA) were cannabis companies, which means the market is “…kind of cleaning itself out a little bit as we go.” That’s one of the typical signs of a maturing market, as more companies depart or consolidate in a bid to better compete.
Pushing for the U.S. Market
Klein is also looking for new opportunities in the U.S. market as the federal government looks to reconsider its stance on marijuana. While some recent layoffs may negatively impact these opportunities, Klein still looks for success overall, especially given how many states have opened up the potential for marijuana sales. It certainly doesn’t hurt that, just over the last year, Canopy Growth has retired about $1 billion in debt, which means lower servicing costs and a better ability to find future financing.
What Is Canopy Growth’s Target Price?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on WEED stock based on three Holds and two Sells assigned in the past three months, as indicated by the graphic below. After an 83.07% loss in its share price over the past year, the average WEED price target of C$5.11 per share implies 0.04% upside potential.
