When I last wrote about Canopy Growth (NYSE:CGC) in mid-June, the Canadian cannabis company had just announced a loss of 1.3 billion Canadian dollars ($952.1 million). As a result, chief executive officer David Klein introduced a strategy reset that would create a renewed focus. No longer would it be all things to all people. I thought this would be good for CGC stock.
Indoors marijuana growing, planting cannabis, holding it in a hand (canopy cgc stock)
In the three months since my June article, CGC stock has lost almost 14% through Sept. 28.
Patient investors needn’t worry. Here’s why.
Until a few days ago, it had traded in a tight range between $16 and $18. Then Acreage Holdings (OTCMKTS:ACRGF) announced its amended arrangement for Canopy to purchase the company once the U.S. federal government legalizes cannabis.
Essentially, it allows Canopy to buy all of the newly created Class E subordinate voting shares at a fixed rate of 0.3048 shares of CGC for each Class E share. Also, Class D subordinate voting shares and Class F multiple voting shares were created. Canopy has an option to buy the Class D shares at a floating value at