Canopy Growth: Goliath Pivots

Summary

Canopy had a better-than-expected quarter, but there is still large problems left over from previous management.

Chief among these are huge cash burn and inventories.

The entire industry has two regulatory issues: the slow rollout of retail in Ontario, and the uncertain pace of recreational legalization internationally.

Canopy is still a company with a lot going for it, but there needs to be a restructuring to deal with the cold hard realities of the Canadian domestic market.

There will be plenty of opportunities for short-term plays, but I still cannot recommend a long-term investment in any of the Canadian cannabis companies.

There Is Good News and Bad News

Chris Wimbush. Canopy’s previous management was violating the First Law of Holes: when you are in a hole, stop digging.

This just reported quarter was a big one

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