Over the past months, many of the leading pot stocks in the market have slumped considerably, and in that regard, TGOD stock was no exception. The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) has a market cap of C$163 million at this point, and since hitting its 52-week high last year, TGOD stock has lost as much as 90% so far.
There was a time when the company was valued at $2 billion, so it's worthwhile looking into the immediate future of TGOD. Last October, the stock tanked by as much as 40% after The Green Organic Dutchman failed to raise fresh capital, so fears have been raised about the company’s cash position.
Key Triggers
Ello Capital, which is a boutique investment bank, stated last month that there are genuine question marks with regards to the cash liquidity of most companies in the cannabis sector. The report went on to state TGOD is going to run out of cash in around four months. That being said, it is also important to point out that analysts expect The Green Organic Dutchman to boost its sales by as much as 591% in 2020 and hit $74.65 million in sales. The sales boost is also expected to have a positive effect on the profit margins.
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TGOD stock is now down by 5.50% at C$0.52 and made a new 52-week low of $0.51.
While it is true that The Green Organic Dutchman has worked on a consumer-focused portfolio of products over the years, the company has also signed on licensing deals in Canada and abroad. The company decided to install a phased construction plan by way of which it will be able to avoid excess production.
In 2019, the cannabis sector suffered primarily because of an oversupply of the product, and TGOD is trying to avoid this happening again in the future. It is also expanding its medical cannabis business through partnerships with clinics.
While The Green Organic Dutchman is making some interesting moves, and there is a lot of room for growth in the sector, the company’s cash position is at dangerously low levels. Some experts believe that investors could look elsewhere in the near-term instead of TGOD stock. What do you think?
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