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Why Canopy Growth Stock Fell 13% in September

By Demitri Kalogeropoulos – Oct 7, 2020 at 10:14AM

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Investors were spooked by weak operating results from a rival.

What happened

Canopy Growth (CGC 4.57%) shareholders trailed a declining market in September as the stock dipped 13% compared to the S&P 500's 3.9% drop, according to data provided by S&P Global Market Intelligence.

That slump added to broader declines for the stock, with shares down nearly 30% so far in 2020.

A dealer shows off marijuana buds.

Image source: Getty Images.

So what

Canopy Growth released some positive news last month, including a partnership with celebrity Martha Stewart on a line of CBD lifestyle products. That platform includes Stewart's "wellness gummies" aimed at reducing stress.

Yet the stock was caught up in market declines that struck the wider market and the marijuana niche. That weak sentiment was amplified by poor sales results out of rival Aurora Cannabis in late September.

Now what

Canopy Growth has a chance to set its own growth narrative when fiscal second-quarter results are released on Nov. 9. In that report, Wall Street is looking for continued progress in management's goal of boosting margins and achieving positive cash flow. But those targets may have been complicated by sluggish demand for recreational marijuana products in the selling months of July, August, and September.

Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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