Canopy Growth Is Making Big Moves In Its Cannabis Business
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Alan Brochstein, CFAInvesting Group LeaderFollow5ShareSavePlay(13min)CommentsSummaryCanopy Growth remains a hold, supported by a strengthened balance sheet and improved liquidity following recent debt refinancing and equity raises.The pending MTL Cannabis acquisition expands CGC’s Canadian footprint, particularly in Quebec, but offers only modest financial synergies and limited near-term upside.CGC trades at a low price-to-tangible book value, but its high adjusted EBITDA multiple and persistent cash burn limit valuation upside.I remain cautious: while downside risk appears limited, CGC must deliver operational growth and positive cash flow to justify a higher rating.Looking for a portfolio of ideas like this one? Members of 420 Investor get exclusive access to our subscriber-only portfolios. Learn More » Sckrepka/iStock via Getty Images I have followed Canopy Growth (CGC) since it went public. I recently upgraded it from Strong Sell to Hold in November, and it has rallied. I am not changing my rating today, but I do wantThis article was written byAlan Brochstein, CFA72.59K FollowersFollowAlan Brochstein, CFA, is one of the first investment professionals to focus exclusively on the cannabis industry. Alan got his start as a financial professional in the securities industry in 1986, managing investments in institutional environments until he founded AB Analytical Services in 2007 in order to provide independent consulting to registered investment advisors. He is also the managing partner of New Cannabis Ventures, a leading provider of relevant financial information in the cannabis industry since 2015. Alan has run the investing group 420 Investor, for investors interested in the publicly-traded cannabis stocks that he moved to Seeking Alpha in 2023, since 2013. As the leader of the investing group 420 Investor, Alan closely covers 19 stocks and shares investment news as it comes out, previews of their earnings reports and analysis of them afterwards. Other features of the group include: a model portfolio, 10 videos per week with chart analysis, 3 summary pieces weekly, a monthly newsletter, and chat for questions Learn More.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.