Core Insights - Canopy Growth Corporation (CGC) is a significant player in the cannabis industry, primarily operating in Canada, with diverse product offerings including PRJ and AIO vape products [1] - The company is facing challenges in Europe and is implementing strategic initiatives such as launching VEAZY and partnering with MTL Cannabis [1] Financial Performance - CGC is expected to report a third-quarter fiscal 2026 earnings per share (EPS) of -$0.03, consistent with the previous quarter's loss of 1 cent per share, which exceeded the Zacks Consensus Estimate by 90.9% [2] - Revenue projections for the upcoming earnings report are approximately $50.6 million, reflecting a 5.3% decline from the same period last year, attributed to ongoing challenges including the anticipation of U.S. marijuana legalization [3][6] - The company has had mixed earnings results over the last four quarters, exceeding expectations twice and missing twice [2] Financial Ratios - CGC maintains a price-to-sales ratio of 2.93 and an enterprise value to sales ratio of 2.77, indicating the market's valuation of its sales [4] - The company's debt-to-equity ratio is 0.35, suggesting a moderate level of debt, while a current ratio of 5.50 indicates strong liquidity, with sufficient current assets to cover liabilities [4][6] Market Sentiment - Despite financial challenges, including a negative earnings yield and price-to-earnings ratio, some contrarian investors view the significant stock price decline of 58% in 2025 as a potential opportunity ahead of the upcoming earnings report [5]

Over the past five years, Canopy Growth (NASDAQ: CGC) has been a profoundly disappointing stock. Shares have lost more than 99% of their value and currently trade at around $1 each. Some might think that at these levels, Canopy Growth is finally attractive. Nothing could be further from the truth. Here is why I wouldn't get anywhere close to this cannabis company, and you probably shouldn't either. Image source: Getty Images. Where to invest $1,000 right now? Our analyst team just revealed what they belie ...

Core Viewpoint - Canopy Growth Corporation (CGC) is expected to report its third-quarter fiscal 2026 results on February 6, with a projected revenue of $50.6 million and a loss per share of 3 cents, indicating a significant increase in losses compared to the previous year [1][2][9]. Financial Performance - In the last reported quarter, CGC posted a loss per share of 1 cent, which was 90.9% better than the Zacks Consensus Estimate [1]. - The Zacks Consensus Estimate for fiscal third-quarter revenues is $50.6 million, reflecting a decrease of 5.3% from the same quarter last year [2]. - The loss per share estimate for the fiscal third quarter has remained constant at 3 cents over the past 30 days [3]. Market Segments - Canopy's cannabis operations encompass both recreational and medical markets, with previous quarter results showing growth in cannabis revenues driven by adult-use and medical cannabis segments in Canada [4]. - Adult-use revenue growth in Canada may have been supported by strong consumer demand for infused pre-roll joints (PRJ) and the launch of All-In-One (AIO) vape products [5]. - Medical cannabis sales in Canada likely benefited from increased insured patient enrollments, larger average order sizes, and an expanded product portfolio under the Spectrum Therapeutics brand [5]. International Operations - International cannabis revenues are under pressure due to ongoing supply-chain and execution challenges in Europe, similar to trends from the previous quarter [6]. - The company has initiated a turnaround strategy focusing on operational oversight and transitioning back to internally produced Canadian GMP flower, which appears to be positively influencing performance [6]. Strategic Initiatives - During the quarter, CGC launched several strategic initiatives, including the Claybourne Gassers range of AIO vaporizers and expanded the Spectrum Therapeutics portfolio in Australia with new softgel capsule offerings [8]. - The company also entered into an agreement to acquire all issued and outstanding common shares of MTL Cannabis Corp., indicating a focus on portfolio optimization and market consolidation [10].

Key Takeaways TLRY and CGC are gaining attention as regulatory changes and global growth reshape the cannabis industry.TLRY posted strong overseas growth, expanded beverages and delivered major cost savings via Project 420.CGC improved margins, cut expenses and ended the quarter with cash exceeding debt by $70 million.The global cannabis market is rapidly evolving, with President Trump’s decision to federally reschedule marijuana in the United States representing one of the most consequential regulatory shi ...

Core Viewpoint - Canopy Growth has faced significant challenges in the market, with its share price dropping 58% in 2025 and 46% the previous year, leading to a bleak outlook for the company as it struggles to grow and hopes for U.S. marijuana legalization remain unfulfilled [1][2]. Financial Performance - Canopy Growth reported cannabis net revenue of CA$51 million, a 12% increase compared to the previous year, and significantly reduced its net loss from CA$128.3 million to CA$1.6 million due to lower impairment and restructuring expenses, along with increased other income [5]. Market Sentiment - Despite the negative sentiment surrounding Canopy Growth, the current low share price may attract contrarian investors, especially with the upcoming earnings report on February 6, 2026, which could potentially provide a short-term boost if results exceed expectations [2][3]. Historical Context - Historically, Canopy Growth has not been a favorable investment, with past earnings often leading to temporary stock price increases followed by declines, indicating a lack of sustainable growth and profitability [6][7]. Operational Challenges - The company has incurred over CA$88 million in operational losses over the past year, highlighting its poor position for future growth and reinforcing its reputation as a risky investment [7].

Core Insights - The Canadian cannabis sector is evolving with companies adapting to changing consumer demands and global regulations, presenting long-term investment opportunities despite volatility [1][2] - U.S. federal reform is influencing sentiment among Canadian operators, with many maintaining indirect exposure to the U.S. market [1][3] Industry Overview - Companies are diversifying to stabilize revenue during downturns and focusing on cost control and operational efficiency to navigate tighter capital markets [2] - Strong balance sheets provide an advantage to resilient operators as weaker competitors retrench [2] - The sector is prioritizing profitability, cash preservation, and scalable growth over rapid expansion, making financial performance increasingly relevant [4] Company Strategies - **Tilray Brands, Inc. (TLRY)**: Diversified across cannabis, wellness, beverage alcohol, and consumer packaged goods, helping stabilize revenue during slowdowns. It has a strong international presence and indirect access to the U.S. market through hemp-derived products [5][6][10] - **Canopy Growth Corporation (CGC)**: Focused on adult-use and medical cannabis with a disciplined strategy. It has structured interests in U.S. THC and wellness businesses, positioning itself for regulatory changes while maintaining a strong retail presence in Canada [12][15][16] - **Village Farms International, Inc. (VFF)**: Combines cannabis and traditional agriculture, focusing on cultivation efficiency and wholesale distribution rather than dispensary ownership. It has shown significant revenue growth and strong cannabis margins [18][21][22] Financial Performance - Tilray has shown improving stability with record quarterly revenue, supported by beverage alcohol acquisitions and steady cannabis sales. It has moved into a net cash position, emphasizing cost controls and operational discipline [10][11] - Canopy Growth has made measurable progress with improving revenue trends and declining operating expenses, although profitability remains a challenge [16][17] - Village Farms has reported strong revenue growth and record cannabis margins, with positive cash flow supporting its balance sheet strength [21][22]

Group 1: Market Overview - Cannabis stocks to watch include Tilray Brands, Canopy Growth, Aurora Cannabis, Silver Spike Investment, and Cronos Group, identified by MarketBeat's stock screener tool [2] - Cannabis stocks are characterized by higher regulatory and legal risks, and they tend to be more volatile than the broader market due to changing laws and consumer demand [2] Group 2: Company Profiles - **Tilray Brands (TLRY)**: Engages in research, cultivation, processing, and distribution of medical cannabis, operating in multiple countries including Canada, Australia, and Germany [3] - **Canopy Growth (CGC)**: Involved in the production, distribution, and sale of cannabis and hemp-based products, primarily in the U.S., Canada, and Germany, with operations segmented into Canada Cannabis and International Markets Cannabis [3] - **Aurora Cannabis (ACB)**: Produces and sells cannabis products in Canada and internationally, operating through Canadian Cannabis, European Cannabis, and Plant Propagation segments [4] - **Silver Spike Investment (SSIC)**: A specialty finance company that invests in the cannabis ecosystem through direct loans and equity ownership of privately held cannabis companies [4] - **Cronos Group (CRON)**: Engages in the cultivation and marketing of cannabis products in Canada, Israel, and Germany, offering a variety of products under several brands [5]

Group 1 - Canopy Growth Corporation (CGC) closed at $1.17, with a daily increase of +2.8%, outperforming the S&P 500's gain of 0.55% [1] - The stock has decreased by 12.98% over the past month, underperforming the Medical sector's gain of 0.19% and the S&P 500's gain of 0.71% [1] Group 2 - The upcoming earnings disclosure for Canopy Growth Corporation is anticipated, with projected earnings per share (EPS) of -$0.03, reflecting a 96.05% increase from the same quarter last year [2] - Revenue is forecasted to be $50.59 million, indicating a 5.34% decline compared to the same quarter of the previous year [2] Group 3 - For the entire fiscal year, Zacks Consensus Estimates predict an EPS of -$0.21 and revenue of $199.68 million, showing changes of +92.95% and +3.3% respectively from the previous year [3] Group 4 - Recent changes to analyst estimates for Canopy Growth Corporation indicate short-term business trends, with positive revisions suggesting optimism about the business outlook [4] - Estimate changes are correlated with near-term stock prices, and the Zacks Rank system has been developed to capitalize on this correlation [5] Group 5 - The Zacks Rank system ranges from 1 (Strong Buy) to 5 (Strong Sell), with 1 stocks delivering an average annual return of +25% since 1988 [6] - Canopy Growth Corporation currently holds a Zacks Rank of 3 (Hold), with no changes in the Zacks Consensus EPS estimate over the past month [6] Group 6 - The Medical - Products industry, part of the Medical sector, holds a Zacks Industry Rank of 156, placing it in the bottom 37% of over 250 industries [7] - The Zacks Industry Rank assesses the strength of industry groups, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Insights - President Trump's executive order to reschedule cannabis to Schedule 3 is considered a significant shift in federal cannabis policy, potentially alleviating the burdensome tax regime affecting U.S. cannabis operators for decades [1][2]. Tax Implications - The executive order could lead to the elimination of Section 280E of the Internal Revenue Code, which currently taxes legal cannabis operators as if they were narcotics traffickers, preventing them from deducting any business expenses [2][3]. - Rescheduling cannabis to Schedule 3 would allow U.S. companies to deduct standard operating costs, significantly improving their financial health and cash flow [3]. Market Reaction - The cannabis industry is responding positively to the news, especially after a strong performance in 2025, where the AdvisorShares MSOS ETF outperformed the S&P 500 [4]. - Despite the optimistic outlook, the sector is still viewed as highly volatile, with many institutional investors remaining cautious due to past political inaction [4]. Remaining Challenges - Even with the potential rescheduling, U.S. cannabis companies still face hurdles, such as the inability to list on major exchanges like NASDAQ or NYSE, which is available to Canadian companies [5]. - The industry is also awaiting "safe harbor" provisions for banking, which remain unresolved [5]. Stock Performance - Recent performance data for cannabis stocks and ETFs shows varied results, with AdvisorShares Pure U.S. Cannabis ETF (NYSE:MSOS) leading with a 68.55% increase over six months, while other companies like Tilray Brands Inc. (NASDAQ:TLRY) and Canopy Growth Corp. (NASDAQ:CGC) show mixed performance [7].

Company Performance - Canopy Growth Corporation (CGC) closed at $1.19, reflecting a -2.87% change from the previous day, underperforming the S&P 500's daily loss of 0.06% [1] - Over the past month, shares of Canopy Growth have decreased by 27.81%, while the Medical sector has lost 0.79% and the S&P 500 has gained 1.99% [1] Earnings Estimates - The upcoming earnings release for Canopy Growth is projected to show an earnings per share (EPS) of -$0.03, which represents a 96.05% increase from the same quarter last year [2] - Revenue is estimated to be $50.59 million, indicating a 5.34% decline compared to the corresponding quarter of the previous year [2] Full Year Projections - For the full year, the Zacks Consensus Estimates project an EPS of -$0.21 and revenue of $199.68 million, reflecting changes of +92.95% and +3.3% respectively from the prior year [3] - Recent changes to analyst estimates suggest evolving short-term business trends, with positive revisions indicating analyst optimism regarding the company's profitability [3] Zacks Rank and Industry Performance - Canopy Growth currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining unchanged over the last 30 days [5] - The Medical - Products industry, which includes Canopy Growth, has a Zacks Industry Rank of 162, placing it in the bottom 34% of over 250 industries [6]