Canadian cannabis stocks have continued to struggle into 2020. The launch of "Cannabis 2.0" has failed to generate significant momentum as investors are still highly skeptical that the industry will be able to get over the many challenges it faces, especially on the domestic front.
Canopy Growth (TSX:WEED)(NYSE:CGC) is the largest cannabis producer in Canada by market cap. Its shares have dropped 51% year-over-year as of close on February 21. The stock is down 8.5% over the past month.
In its third quarter fiscal 2020 report, Canopy Growth generated $123.8 million in net revenue. This was up 62% from the prior quarter. Adjusted EBITDA came in at a $91.7 million loss, but this was up 41% from Q2 2020.
Canopy Growth maintained its leading market share in retail, and it began its first shipments of edibles in December 2019. This is projected to be an explosive market in the months and years to come.
Developments south of the border may also excite Canopy Growth investors. Bernie Sanders, who has vowed to pursue federal legalization of recreational cannabis, came out with a dominant win in the Nevada caucuses.
He has established himself as the clear front-runner in the Democratic primary ahead of the South Carolina primary, and the all-important Super Tuesday contests on March 3.
Canopy is perhaps the most well-prepared Canadian company to make a move in the U.S. in the event of federal legalization. This is reason enough to maintain faith in the company this early in 2020.
