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Buds & Duds: Cannabis stocks reel after Canopy Growth posts eye-popping C$375 million loss

All major indicies were down across the board in a sea of red across North American markets

dollar pot leaf
Zenabis, True Leaf and Chemesis shares bucked the trend on Thursday

Cannabis stocks bled on Thursday after investors sent Canopy’s stock sliding on disappointing quarterly earnings that saw the producer record a steep loss.

The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada dropped 5.6% at 114.9 points. Elsewhere, the Horizons Marijuana Life Sciences Index ETF fell 6.1% to C$9.17, while the OTCQX Cannabis Index sank 4.2% at 430.2 points.

Duds

While investors braced for bad news as the biggest pot producer reported earnings, it was hard to imagine that Thursday’s results could be this bad.

Canopy Growth Corp (TSE:WEED) (NYSE:CGC) shares hit a record low after posting a C$375 million loss after its bet on softgels and oils went awry.

Its revenue came in at C$77 million, a significant decrease from the previous quarter as sales fell 7%.

The cannabis giant has now missed analyst expectations in eight out of the last 11 quarters it has reported.

Shares of Canopy sank an eye-watering 15.5% in Toronto, hitting C$20.66, and 15.9% in New York at US$15.56.

Canopy’s losses seemed to weigh heavily on the minds of Aurora Cannabis Inc (TSE:ACB) (NYSE:ACB) investors, who sent shares of the cannabis producer trading 9% lower in Toronto and 10% lower in New York at C$4.27 and US$3.20 respectively.

The Canadian producer will report its own quarterly results after market close Thursday.

Buds

On a day where flat was the new green, a few companies managed to see its shares buck the trend.

Zenabis Global Inc (TSE:ZENA) (OTCMKTS:ZBISF) saw its shares inch 1.4% higher in Canada after it posted quarterly revenue showing the cannabis producer narrowing its third quarter 2020 losses to US$5.8 million from US$18.4 million over the previous quarter.

The Vancouver-based company more than doubled cultivation from the previous quarter, producing more than 5,200 kilograms of dried cannabis and beating internal projections by 25%.

Other companies in the green included Chemesis International Inc (CSE:CSI) (OTCMKTS:CADMF) up 2.3% in Canada at C$0.44.

Pot for pets company True Leaf Brands Inc (CSE:MJ) also jumped 13.6% at C$0.13 and 18.6% on OTC markets at US$0.09 on no new news.

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

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