What happened
Shareholders of Canadian cannabis company Sundial Growers (SNDL 3.08%) have had plenty to worry about lately. The stock is at risk of being delisted from the Nasdaq, as the share price hovers near $0.60.
Investors recently got a reprieve from that concern, but today the stock dropped sharply for another reason. Sundial shares closed the day down 5.94%.
Image source: Getty Images.
So what
Earlier this month, Sundial was granted a 180-day extension by the Nasdaq to comply with its minimum price requirement. Sundial will need its bid price to close at or above $1.00 per share for at least 10 consecutive trading days before Aug. 8 to ensure compliance. That's given shareholders some breathing room, but the underlying business will be what is needed to drive the shares higher.
News today on the state of retail cannabis sales in Canada probably won't help, and that may be what had the stock dropping. Those sales rose 28.5% year over year in December, according to New Cannabis Ventures. That sounds good, but it was not as much as expected, according to the report. It also said that January sales are forecast to be almost 6% below December levels.
It also doesn't help growers like Sundial that the increase in sales has come as prices are falling and competition from a growing number of retail outlets is increasing. Sundial hasn't yet announced when it will report its fourth-quarter 2021 earnings. But if it follows prior schedules, it should be in the middle of March. Shareholders will want to focus on what management sales about both sales and the delisting process when it reports.
