Canopy Growth Corp. (CGC) $48.69 posted fiscal third-quarter revenue. Corona-owner Constellation Brands Inc. (STZ) invested $4 billion in Canopy Growth. With Constellation cash CGC is spending like a drunken sailor to hide defects in its balance sheet.
The cannabis company posted a loss of 38 Canadian cents a share on revenue after excise taxes of C$83.1 million. In the same quarter a year earlier, Canopy Growth posted earnings of 1 Canadian cent a share on restated revenue of C$22 million. From our perspective, CGC remains an over-hyped cannabis play with a market capitalization of $15.9 billion for a $4 billion value enterprise, and 232 million shares outstanding and a “true float" of 42.6 million. The numbers don’t add up, especially with a score of SP+GTM=76.
We track what the other guys are going to determine our best course of action. Our disciplines have prevented us from making monumental mistakes, while offering our clients the best possible solutions. Case in point is Canopy Growth -- true their facilities product cannabis at a brisk rate; but at what cost? Their business model to grow product is less than the market value. In time, marijuana will flow the traditional commodity equitation of supply and demand. What happens then?