Canopy Growth Corp (CGC) shares took a significant hit this week, plummeting by 15.8% to $5.24. The decline follows the U.S. Drug Enforcement Administration (DEA) announcement of a delay in its decision on rescheduling cannabis. This postponement, which extends the decision until after the November presidential election, has injected a wave of uncertainty into the cannabis market, resulting in widespread selling across the sector.
Canopy Growth, a leading cannabis company globally, experienced a 15% drop this week in response to the DEA’s update. This decline underscores growing investor concerns about the prolonged regulatory uncertainty, which could hinder the company’s expansion efforts in the U.S., a key market for its future growth. Companies like Canopy Growth were banking on a favorable rescheduling outcome to solidify their U.S. market presence. With the decision now pushed indefinitely, investors are becoming more cautious about potential regulatory obstacles that could impede the company’s growth.
The political climate is further fueling market volatility. Vice President Kamala Harris, a strong advocate for cannabis reform, has been seen as a driving force behind federal legalization. However, the potential re-election of Donald Trump presents a contrasting outlook, as his vice-presidential candidate opposes cannabis legalization. This uncertainty creates a challenging environment for cannabis stocks, contributing to investor anxiety.
Canopy Growth has been strategically positioning itself to capitalize on the U.S. market through partnerships and acquisitions. However, the delays from the DEA complicate these efforts, potentially hindering the company’s ability to enter the U.S. market under favorable regulatory conditions. This uncertainty could slow Canopy’s expansion plans, putting pressure on its revenue growth and profitability in the near term.
Furthermore, the delay may impact Canopy Growth’s ability to secure additional financing or investments, as regulatory ambiguity may deter investors seeking more clarity on the U.S. market’s legal landscape.
How To Buy CGC Stock
If you’re interested in buying shares of Canopy Growth, you’ll typically need to do so through a brokerage account. You can find a list of potential trading platforms online. Many platforms offer the option of buying ‘fractional shares,’ allowing you to own portions of stock without buying an entire share. This is particularly useful for stocks like Berkshire Hathaway or Amazon.com, which can cost thousands of dollars per share. However, if you only want to invest a small amount, fractional shares allow you to do so. In the case of Canopy Growth, trading at $5.16 at the time of publication, $100 would purchase you 19.38 shares of stock.
Shorting CGC Stock
If you’re looking to bet against Canopy Growth, the process is more complex. You’ll need access to an options trading platform or a broker who allows you to ‘go short’ a share of stock by lending you the shares to sell. The process of shorting a stock can be found at various online resources. Alternatively, if your broker allows you to trade options, you can either buy a put option or sell a call option at a strike price above the current share price. Both options allow you to profit from a share price decline. According to data from Benzinga Pro, CGC has a 52-week high of $19.20 and a 52-week low of $2.76.
