CGC Stock Rebounds: Canopy Growth Gets Extraction License

CGC stock

After a dismal week, CGC stock is recovering a bit this morning after Canopy Growth (TSX:WEED) (NYSE:CGC) won a license from Health Canada for KeyLeaf Life Sciences facility in Saskatoon, Saskatchewan.

Canopy Growth License

Despite the disappointment of the past few months among marijuana stocks, many of the leading companies in the industry delivered impressive results, and that resulted in the return of optimism to the sector. As everyone knows, Canopy Growth is one of the biggest companies in the marijuana sector, and today, the company made a major announcement. On Tuesday, Canopy announced that its KeyLeaf Life Sciences facility located in Saskatoon has been awarded the coveted Health Canada license.

It goes without saying this is a major development for the company since the number of extraction units under its control now rises to three. The two other extraction facilities are located in BC and Smiths Falls. The KeyLeaf facility was acquired by Canopy Growth quite recently, but it takes the company's capacity to a new level.

>> Auxly Stock: Cultivation and Purchase Agreement with PEI Hemp Farmers

The facility will be able to generate as much as 5,000 kilos of either cannabis or hemp biomass on a daily basis. The company stated that this is another development in the company’s path to building its capacity substantially and eventually cutting costs by a significant margin by the end of the year.

At the time of writing, CGC stock is trading higher by 2% at $27.25 on the NYSE.

Last week, the company’s Q2 2019 financial results proved to be a disappointment as it fell short of analysts’ estimates. Although its revenues rose three-fold from the previous quarter to $90.5 CAD million, it still fell short of estimates. This is disappointing since Canopy is a large company and its revenues should have increased much more considering the fact that cannabis is now legal in Canada. Analysts had estimated revenues of $109 million CAD, and the final result was definitely a downer.

Production rose to 40,960 kilos for the quarter, which is a significant rise from 9,685 kilos in the first quarter. The losses for the period was another shock as Canopy took a hit of $1.3 million or $3.70 a share. In the year-ago period, the losses stood at only $91,000.

So far this year, CGC stock is down 6% and down 47% from its January’s peak price of $51.

What do you think about Canopy's KeyLeaf Life Sciences facility being awarded a license by Health Canada?

>> Read More Canopy News

Featured image: Canva

If You Liked This Article Click To Share