Canopy Growth Cuts Costs
Canopy Growth Corp., one of the largest cannabis companies in the world, announced on Thursday that it would be cutting 800 job positions as part of its efforts to reduce costs and realize a profit through operations. The headcount reduction will affect 40% of its workforce immediately, and the company will be shedding assets in Canada. The company’s shares were down over 15 percent after the announcement.
The company has been working to cut costs through a series of measures, including layoffs, exit from some international markets, store closures, and divestiture of its retail business across Canada. The right-sizing of its Canadian business is expected to significantly reduce its cash costs, according to Chief Financial Officer, Judy Hong. She also stated that the company expects to deliver at least quarterly breakeven adjusted EBITDA in its Canadian cannabis business in fiscal 2024.
In addition to job cuts, the company’s streamlining efforts in Canada include exiting cannabis flower cultivation in its Smiths Falls facility in Ontario, ceasing the sourcing of cannabis flower from its Quebec facility, and moving to a third-party sourcing model for cannabis beverages, edibles, vapes, and extracts. The company sees saving CAD 140 million to CAD 160 million over the next 12 months from its latest cost-cutting measures and expects to record related pretax charges of CAD 425 million to CAD 525 million in the current quarter and the first half of fiscal 2024.
Canopy Growth’s adjusted core loss widened to CAD 87.5 million in the quarter ending December 31, 2022, from CAD 67.4 million a year earlier. T
The cannabis industry has been facing significant challenges, including high costs, low demand, and intense competition. The COVID-19 pandemic has also impacted the industry, causing supply chain disruptions and reduced consumer demand. In this environment, Canopy Growth’s decision to cut costs and streamline operations makes sense, as the company looks to remain competitive and ultimately turn a profit.
Canopy Growth’s decision to cut jobs and shed assets in Canada is part of its efforts to reduce costs, streamline operations and turn a profit. The company sees savings of CAD 140 million to CAD 160 million over the next 12 months and expects to achieve at least quarterly breakeven adjusted EBITDA in fiscal 2024. Despite the challenges facing the cannabis industry, Canopy Growth remains a major player in the industry and its efforts to streamline operations should help it remain competitive in the years to come.
WEED Stock Price Forecast & Analysis
Canopy Growth: Based on the stock forecasts from 11 analysts, the average target price for Canopy Growth Corporation is CAD 4.86 over the next 12 months. This represents a 31.5% increase from its current stock price of CAD 3.67.
The average analyst rating for Canopy Growth Corporation is a “Hold”, which indicates a neutral outlook on the stock. This means that analysts do not believe the stock will perform exceptionally well in the near future, but they also do not believe it will perform poorly. The rating is based on the company’s financial performance, growth potential, and market conditions, among other factors.
Stock Target Advisor’s own stock analysis of Canopy Growth Corporation is Bearish, which is based on 1 positive signal and 7 negative signals. This suggests that the analysis considers more negative factors affecting the stock and provides a pessimistic outlook.
In terms of stock performance, Canopy Growth Corporation’s stock price has changed by -10.05% over the past week, +14.69% over the past month, and -62.44% over the last year. The stock has been affected by a number of factors, including market conditions, company performance, and investor sentiment, among others.