Cannabis Stock Optimism Sweeping Canada
Canopy Growth the Latest Stock to Take Off on Favourable Market Outlook – LPC
Canopy Growth is the latest indication that cannabis stock optimism is sweeping Canada. A combination of factors including Joe Biden’s presidential win, new states that have legalized cannabis, and smaller-than-expected losses helped. Canopy jumped almost 11 per cent in pre-market trading.
“We saw another quarter of improvement in our operating expense ratio while our marketing and R&D investments are being re-directed to drive sales,” said CFO Mike Lee. “Importantly, our end-to-end review has identified cost savings opportunities in the range of $150-$200 million.”
He added that Canopy is “accelerating our path to profitability” – especially in Canada. If there’s anything that will fuel cannabis stock optimism, it’s the promise of profits.
The possible moves towards cannabis legalization in the US are also a good sign. Although Canadian cannabis companies cannot ship their product directly to the US, there are other possible market moves. For example, Canopy has the option to buy Acreage Holdings in the US, when and if legalization happens. That would open a whole new – and growing – market for Canopy.
So yes, there are lots of good reasons for cannabis stock optimism lately. And in turn, there are lots of good reasons to believe the cannabis industry will be turning the corner to become a profitable, mature industry soon.
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