Canadian cannabis company Canopy Growth Corporation (TSE:WEED) (NASDAQ:CGC) has taken a bold step to halt funding to BioSteel Sports Nutrition (a dietary supplements company) and is preparing a structured sale of BioSteel’s assets. This move is part of Canopy Growth’s broader plan to tighten its focus and resources on expanding its presence in the North American cannabis markets.
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BioSteel had been causing a financial drain on Canopy Growth, contributing to about 60% of its adjusted EBITDA loss in the first quarter of Fiscal 2024, so this move is expected to benefit Canopy financially. Now, Canopy is aiming for positive adjusted EBITDA by the end of FY2024, and the firm is looking to recover some of its investments from the forthcoming sale process, standing as BioSteel’s primary shareholder and creditor.
Canopy CEO David Klein highlighted that even though BioSteel witnessed high growth over the years, funding its operations strayed away from Canopy Growth’s cannabis-centric strategy. Meanwhile, BioSteel has “commenced proceedings” in the Ontario Superior Court of Justice to safeguard its assets. Essentially, it is filing for bankruptcy.
Is Canopy Growth Stock a Buy, According to Analysts?
According to analysts, Canopy Growth stock comes in as a Moderate Sell based on one Buy, four Holds, and four Sells assigned in the past three months. The average Canopy Growth stock price target of C$1.07 implies 40.3% downside potential.
If you’re wondering which analyst you should follow if you want to buy and sell Canopy Growth stock, the most accurate analyst covering the stock (on a one-year timeframe) is W. Andrew Carter of Stifel Nicolaus, with an average return of 17.76% per rating and a 57% success rate. Click on the image below to learn more.
