What happened
Struggling pot stock Canopy Growth (CGC 2.41%) was looking pretty good to investors on Thursday. The Canada-based cannabis slinger's shares closed the day more than 7% higher, after the company announced an asset sale.
So what
Canopy said it has entered into an agreement to sell its headquarters building, known as Hershey Drive, in Smiths Falls, Ontario. The buyer, appropriately, is its original owner: Hershey Canada, the Canadian wing of American candy manufacturer Hershey. The marijuana company will receive around 53 million Canadian dollars ($39 million) in cash for the property.
This is the seventh in a series of asset divestments for Canopy Growth, with all of the deals combined totaling roughly $115 million.
With the continued divestments, the company is making good on a pledge to slim down in order to consolidate operations and save on costs.
Now what
The marijuana business in Canada is a tough slog. Competition is high, black-market product eats into the business of licensed producers and retailers, and the licensing regime hasn't exactly been smooth over the years. Like many other weed companies, Canopy Growth continues to struggle, consistently posting bottom-line losses. Asset sales can only go so far in helping improve its business.
