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Cannabis companies eye Europe for greener pastures

Cannabis companies in North America are experiencing lots of trouble, and companies that are looking to reap profits from cannabis are suffering from significant losses. In the meantime, European companies such as World High Life PLC are basking in the new opportunities brought by the emerging cannabis industry.

The cannabis sector needs a fresh look because its markets remain unattractive despite the changes in equity valuation and investor attitudes.

Canopy Growth holds the blue-chip cannabis market leader position. Before Constellation Brands Inc. acquired its first stake in 2017, Canopy Growth had already secured a significant amount of funds. A few days before cannabis was legalized in Canada; Canopy Growth shares increased by $55.45 (C$73.75). However, the stock price has dropped by 73% since then, and within the past six months, the company recorded the highest losses ever.

Canopy Growth shares were valued at $18 billion (C$24 billion) by the stock market at the end of April 2019. At the moment, the value at the stock market has dropped to less than $5.2 billion (C$7billion). Compared to the first quarter, the company’s sales were down 15% in the second quarter.

Apart from Canopy, other companies suffering from the downturn in the cannabis market are Aphria Inc. whose shares have fallen 59% since April, and Aurora Cannabis Inc. whose shares have fallen 76% since the end of the first quarter of 2019. In the cannabis sector, companies are struggling with declining liquid assets, expensive operations, and shareholder attenuation.

Read more at CNW420

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