Many cannabis stocks are declining today after one of the largest companies in the sector, Canopy Growth (NASDAQ:CGC), reported fiscal fourth-quarter results that were significantly below analysts’ average estimates. CGC stock is tumbling 15% in early trading.
Meanwhile, another cannabis company, Aurora (NASDAQ:ACB), announced that it would raise $150 million by selling stock and warrants. That news also seems to be putting downward pressure on cannabis stocks.
Canopy’s Q4 Results
The company’s Q4 revenue dropped 25% to 111.8 million CAD, well below analysts’ average estimate of 130.5 million CAD. The cannabis maker reported a per share loss of 1.46 Canadian dollars. That is also much wider than estimates for a loss of 21 cents CAD. Canopy CFO Judy Hong said:
“Achieving profitability is critical and we have undertaken additional initiatives to streamline and drive efficiencies for our global cannabis business. … [W]e are focused on executing our path to profitability in Canada, while we continue to invest in high potential opportunities.”
The company added that it would seek to grow its business in the U.S. Finally, Canopy predicted that its EBITDA, excluding certain items, would be positive next year.
Aurora Cannabis announced this morning that it would sell 61.2 million of its units to “a syndicate of underwriters led by Canaccord Genuity and BMO Capital Markets” for about $150 million. Each unit will consist of one share of ACB stock and a warrant to buy one share of the stock for $3.20 within the next three years.
Among the other cannabis stocks in focus today are Tilray (NASDAQ:TLRY) and Cronos Group (NASDAQ:CRON).
In early trading, ACB stock tumbled 36%, TLRY stock retreated 6.3%, and CRON stock also gave back 3%.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.