TGOD Stock Hits New Low: Any Way Back for the Troubled Pot Stock?

TGOD stock

TGOD stock sunk to a new low of $0.41 this week amidst persisting headwinds in the Canadian cannabis space—is there any hope of redemption for the troubled Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF)?

Cash and Liquidity Concerns

At its peak in 2019, The Green Organic Dutchman had a market capitalization of over C$2 billion. Now, it sits at just C$137 million after TGOD stock was hammered by financing concerns amid a broader market underperformance in the latter half of the year. Cash and liquidity have been a genuine concern for firms across the industry, regardless of size, and a report from Ello Capital suggests that TGOD may only have around four months of reserves left. TGOD stock is currently trading for $0.44.

90% Wiped from TGOD Stock

Like many Canadian cultivators, The Green Organic Dutchman undertook an aggressive expansion strategy in the early days of the cannabis market in an effort to gain an edge on its competitors, aiming to bring total production capacity to 219,000 kilograms by the end of this year. With cannabis sales failing to reach the anticipated heights as a result of a lack of retail visibility and regulatory hurdles, the cash quickly began to dry up for the Ontario-based pot producer, resulting in over 90% of TGOD stock being wiped out in just a few short months.

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The company was forced to put its Ancaster facility on the market with a price tag of C$95 million, despite construction being incomplete at the site and TGOD's total investment standing at C$107 million. The company eventually reached a sale-leaseback agreement on the facility, which provided it with C$23 million to complete construction, as well as a provision allowing The Green Organic Dutchman to purchase the site for $1 after ten years. Despite the agreement shoring up the firm's immediate future, TGOD stock has continued to bottom out in the weeks since.

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