Article by Bill Alpert, Barron’s
Retail sales of marijuana in Canada will remain slow, BMO Securities analyst Tamy Chen said in a note released Monday. The scarcity of retail stores in the country probably put a lid on fiscal fourth-quarter revenue at Canopy Growth . The pot producer will announce results for the quarter ended in March on June 20.
Chen has a Market Perform rating on Canopy stock (ticker: CGC or WEED.Canada), which closed at 60.30 Canadian dollars (US$44.77) Monday on Toronto’s exchange, where it is dual listed. She thinks the stock could reach C$65.
Canadian producers such as Canopy mostly sell their product wholesale to distributors, so the slow rollout of retail shops doesn’t directly affect their revenue. New data from the government agency Health Canada show that wholesale weed shipments did indeed jump in the month of March to 14,700 kilograms, from 7,500 in February. But retail purchases by Canada’s consumers in the March quarter were flat with December’s, Chen notes.
So the BMO analyst is pulling back on her revenue forecasts for Canopy’s fiscal year ending in March 2020.