CGC stock is on the rebound today after pot stocks took a hammering in the wake of news that Aurora Cannabis (TSX:ACB) (NYSE:ACB) was laying off up to 500 staff and on the hunt for a new CEO.
Aurora Announcement Rocks Cannabis Market
Following a bullish start to the year that saw many cannabis stocks recover some of the disastrous losses incurred in 2019, the market was dealt a major blow late last week on news that Aurora was laying off up to 20% of its staff, as well as the departure of long-time CEO Terry Booth. Aurora is the second biggest cannabis company in Canada, second only to Canopy Growth (TSX:WEED) (NYSE:CGC), and news of its dire financial position hampered gains in CGC stock, which had dropped over 10% since the Aurora announcement.
No Sour Grapes for CGC Stock
However, the stock has been bolstered today following an announcement that Canopy would lease its Concession 5 Vineyard to Niagara College to be run by the NC Learning Enterprise Corporation (NCLEC). The vineyard property is based next to its Tweed Farms greenhouses in Niagara-on-the Lake. Canopy Growth purchased the land last May and was on the search for a professional grape cultivator who would run the vineyard in a sustainable way. CGC stock is up 7% on Tuesday.
"Ensuring the vineyard continued to operate in a sustainable manner was very important to Canopy Growth as well as the community of Niagara-on-the-Lake," said Canopy's Jeff Ryan. "This partnership maintains the historical use of the property and we could not be more satisfied that it will become a hub for learning to be enjoyed by Niagara College’s students for decades to come."
CGC stock is currently trading for $20.36 in New York.
Earnings in Focus
Canopy Growth is set to report its third-quarter earnings before the market opens on Friday. Analysts expect the company to report a 25% increase in revenue to C$104 million; however, a net loss of C$181 million is also expected. The release of Canopy's results is sure to have a major impact on the market as a whole, and with the possibility for a few surprises, it's difficult to judge where CGC stock could go from here.
Featured Image: Canva