Core Viewpoint - Canopy Growth has experienced a significant decline in stock value, losing over 99% and currently trading around $1, indicating that it may not be an attractive investment despite its low price [1] Financial Performance - Canopy Growth's revenue has been inconsistent, with a slight increase in net revenue of 6% year-over-year to CA$66.7 million ($49.3 million) in Q2 of fiscal year 2026 [3] - The company's net loss per share improved to CA$0.01 ($0.0074) compared to a loss of CA$1.48 ($1.09) in the same period last year [3] Industry Challenges - The cannabis industry faces structural problems, including significant regulatory oversight, intense competition, and illegal sales channels that undermine legal businesses [4] - The recent reclassification of cannabis from Schedule I to Schedule III in the U.S. may provide some benefits, such as easier access to banking and tax deductions, but it does not address Canopy Growth's specific challenges, especially given its struggles in the Canadian market since legalization in 2018 [5]

Core Viewpoint - Canopy Growth Corporation (CGC) is expected to report its third-quarter fiscal 2026 results on February 6, with a projected revenue of $50.6 million and a loss per share of 3 cents, indicating a significant increase in losses compared to the previous year [1][2][9]. Financial Performance - In the last reported quarter, CGC posted a loss per share of 1 cent, which was 90.9% better than the Zacks Consensus Estimate [1]. - The Zacks Consensus Estimate for fiscal third-quarter revenues is $50.6 million, reflecting a decrease of 5.3% from the same quarter last year [2]. - The loss per share estimate for the fiscal third quarter has remained constant at 3 cents over the past 30 days [3]. Market Segments - Canopy's cannabis operations encompass both recreational and medical markets, with previous quarter results showing growth in cannabis revenues driven by adult-use and medical cannabis segments in Canada [4]. - Adult-use revenue growth in Canada may have been supported by strong consumer demand for infused pre-roll joints (PRJ) and the launch of All-In-One (AIO) vape products [5]. - Medical cannabis sales in Canada likely benefited from increased insured patient enrollments, larger average order sizes, and an expanded product portfolio under the Spectrum Therapeutics brand [5]. International Operations - International cannabis revenues are under pressure due to ongoing supply-chain and execution challenges in Europe, similar to trends from the previous quarter [6]. - The company has initiated a turnaround strategy focusing on operational oversight and transitioning back to internally produced Canadian GMP flower, which appears to be positively influencing performance [6]. Strategic Initiatives - During the quarter, CGC launched several strategic initiatives, including the Claybourne Gassers range of AIO vaporizers and expanded the Spectrum Therapeutics portfolio in Australia with new softgel capsule offerings [8]. - The company also entered into an agreement to acquire all issued and outstanding common shares of MTL Cannabis Corp., indicating a focus on portfolio optimization and market consolidation [10].

Industry Overview - The global cannabis market is rapidly evolving, with a projected 14% CAGR through 2031, rising from an estimated $45 billion in 2026 [1] - President Trump's decision to federally reschedule marijuana in the United States marks a significant regulatory shift [1] Company Analysis: Tilray Brands - Tilray is the top cannabis producer in Canada by revenue and the fourth-largest craft beer brewer in the United States [3] - The company has seen a 36% year-over-year increase in international cannabis revenues and a 51% sequential increase, marking one of its strongest international quarters [4] - Tilray's beverage expansion began with the acquisition of SweetWater in December 2020 and has scaled significantly through subsequent acquisitions [5] - The company ended the second quarter of fiscal 2026 with approximately $292 million in cash and marketable securities, reducing debt by roughly $4 million [6] - Tilray's financials highlight strength in the international cannabis business while capitalizing on beverage and wellness products [17] Company Analysis: Canopy Growth - Canopy Growth's second-quarter fiscal 2026 was among its strongest, driven by a disciplined focus on fundamentals and renewed momentum in the adult-use cannabis business [7] - The company reported over $21 million in annualized savings through its expense reduction initiative, surpassing its $20 million target ahead of schedule [10] - Canopy Growth ended the quarter with $298 million in cash and cash equivalents, exceeding debt balances by $70 million [11] - The company is committed to the European market and has improved supply chain execution [9] Financial Performance - Over the past six months, Tilray Brands shares have climbed 31.3%, while Canopy Growth shares are up 8.7% [14] - Tilray Brands trades at a forward, five-year Price/Sales (P/S) of 0.98X, below its median of 2.16X, while Canopy Growth trades at 1.93X, also at a discount to its median of 2.80X [15] Earnings Estimates - The Zacks Consensus Estimate for Tilray Brands' fiscal 2026 loss per share stands at 56 cents, compared to 10 cents in the year-ago quarter [12] - The Zacks Consensus Estimate for Canopy Growth's fiscal 2026 loss currently stands at 21 cents per share, reflecting a 92.9% improvement from the year-over-year figure [13]

Core Viewpoint - Canopy Growth has faced significant challenges in the market, with its share price dropping 58% in 2025 and 46% the previous year, leading to a bleak outlook for the company as it struggles to grow and hopes for U.S. marijuana legalization remain unfulfilled [1][2]. Financial Performance - Canopy Growth reported cannabis net revenue of CA$51 million, a 12% increase compared to the previous year, and significantly reduced its net loss from CA$128.3 million to CA$1.6 million due to lower impairment and restructuring expenses, along with increased other income [5]. Market Sentiment - Despite the negative sentiment surrounding Canopy Growth, the current low share price may attract contrarian investors, especially with the upcoming earnings report on February 6, 2026, which could potentially provide a short-term boost if results exceed expectations [2][3]. Historical Context - Historically, Canopy Growth has not been a favorable investment, with past earnings often leading to temporary stock price increases followed by declines, indicating a lack of sustainable growth and profitability [6][7]. Operational Challenges - The company has incurred over CA$88 million in operational losses over the past year, highlighting its poor position for future growth and reinforcing its reputation as a risky investment [7].

Core Insights - The Canadian cannabis sector is evolving with companies adapting to changing consumer demands and global regulations, presenting long-term investment opportunities despite volatility [1][2] - U.S. federal reform is influencing sentiment among Canadian operators, with many maintaining indirect exposure to the U.S. market [1][3] Industry Overview - Companies are diversifying to stabilize revenue during downturns and focusing on cost control and operational efficiency to navigate tighter capital markets [2] - Strong balance sheets provide an advantage to resilient operators as weaker competitors retrench [2] - The sector is prioritizing profitability, cash preservation, and scalable growth over rapid expansion, making financial performance increasingly relevant [4] Company Strategies - **Tilray Brands, Inc. (TLRY)**: Diversified across cannabis, wellness, beverage alcohol, and consumer packaged goods, helping stabilize revenue during slowdowns. It has a strong international presence and indirect access to the U.S. market through hemp-derived products [5][6][10] - **Canopy Growth Corporation (CGC)**: Focused on adult-use and medical cannabis with a disciplined strategy. It has structured interests in U.S. THC and wellness businesses, positioning itself for regulatory changes while maintaining a strong retail presence in Canada [12][15][16] - **Village Farms International, Inc. (VFF)**: Combines cannabis and traditional agriculture, focusing on cultivation efficiency and wholesale distribution rather than dispensary ownership. It has shown significant revenue growth and strong cannabis margins [18][21][22] Financial Performance - Tilray has shown improving stability with record quarterly revenue, supported by beverage alcohol acquisitions and steady cannabis sales. It has moved into a net cash position, emphasizing cost controls and operational discipline [10][11] - Canopy Growth has made measurable progress with improving revenue trends and declining operating expenses, although profitability remains a challenge [16][17] - Village Farms has reported strong revenue growth and record cannabis margins, with positive cash flow supporting its balance sheet strength [21][22]

Group 1: Market Overview - Cannabis stocks to watch include Tilray Brands, Canopy Growth, Aurora Cannabis, Silver Spike Investment, and Cronos Group, identified by MarketBeat's stock screener tool [2] - Cannabis stocks are characterized by higher regulatory and legal risks, and they tend to be more volatile than the broader market due to changing laws and consumer demand [2] Group 2: Company Profiles - **Tilray Brands (TLRY)**: Engages in research, cultivation, processing, and distribution of medical cannabis, operating in multiple countries including Canada, Australia, and Germany [3] - **Canopy Growth (CGC)**: Involved in the production, distribution, and sale of cannabis and hemp-based products, primarily in the U.S., Canada, and Germany, with operations segmented into Canada Cannabis and International Markets Cannabis [3] - **Aurora Cannabis (ACB)**: Produces and sells cannabis products in Canada and internationally, operating through Canadian Cannabis, European Cannabis, and Plant Propagation segments [4] - **Silver Spike Investment (SSIC)**: A specialty finance company that invests in the cannabis ecosystem through direct loans and equity ownership of privately held cannabis companies [4] - **Cronos Group (CRON)**: Engages in the cultivation and marketing of cannabis products in Canada, Israel, and Germany, offering a variety of products under several brands [5]

Group 1 - Canopy Growth Corporation (CGC) closed at $1.17, with a daily increase of +2.8%, outperforming the S&P 500's gain of 0.55% [1] - The stock has decreased by 12.98% over the past month, underperforming the Medical sector's gain of 0.19% and the S&P 500's gain of 0.71% [1] Group 2 - The upcoming earnings disclosure for Canopy Growth Corporation is anticipated, with projected earnings per share (EPS) of -$0.03, reflecting a 96.05% increase from the same quarter last year [2] - Revenue is forecasted to be $50.59 million, indicating a 5.34% decline compared to the same quarter of the previous year [2] Group 3 - For the entire fiscal year, Zacks Consensus Estimates predict an EPS of -$0.21 and revenue of $199.68 million, showing changes of +92.95% and +3.3% respectively from the previous year [3] Group 4 - Recent changes to analyst estimates for Canopy Growth Corporation indicate short-term business trends, with positive revisions suggesting optimism about the business outlook [4] - Estimate changes are correlated with near-term stock prices, and the Zacks Rank system has been developed to capitalize on this correlation [5] Group 5 - The Zacks Rank system ranges from 1 (Strong Buy) to 5 (Strong Sell), with 1 stocks delivering an average annual return of +25% since 1988 [6] - Canopy Growth Corporation currently holds a Zacks Rank of 3 (Hold), with no changes in the Zacks Consensus EPS estimate over the past month [6] Group 6 - The Medical - Products industry, part of the Medical sector, holds a Zacks Industry Rank of 156, placing it in the bottom 37% of over 250 industries [7] - The Zacks Industry Rank assesses the strength of industry groups, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Insights - President Trump's executive order to reschedule cannabis to Schedule 3 is considered a significant shift in federal cannabis policy, potentially alleviating the burdensome tax regime affecting U.S. cannabis operators for decades [1][2]. Tax Implications - The executive order could lead to the elimination of Section 280E of the Internal Revenue Code, which currently taxes legal cannabis operators as if they were narcotics traffickers, preventing them from deducting any business expenses [2][3]. - Rescheduling cannabis to Schedule 3 would allow U.S. companies to deduct standard operating costs, significantly improving their financial health and cash flow [3]. Market Reaction - The cannabis industry is responding positively to the news, especially after a strong performance in 2025, where the AdvisorShares MSOS ETF outperformed the S&P 500 [4]. - Despite the optimistic outlook, the sector is still viewed as highly volatile, with many institutional investors remaining cautious due to past political inaction [4]. Remaining Challenges - Even with the potential rescheduling, U.S. cannabis companies still face hurdles, such as the inability to list on major exchanges like NASDAQ or NYSE, which is available to Canadian companies [5]. - The industry is also awaiting "safe harbor" provisions for banking, which remain unresolved [5]. Stock Performance - Recent performance data for cannabis stocks and ETFs shows varied results, with AdvisorShares Pure U.S. Cannabis ETF (NYSE:MSOS) leading with a 68.55% increase over six months, while other companies like Tilray Brands Inc. (NASDAQ:TLRY) and Canopy Growth Corp. (NASDAQ:CGC) show mixed performance [7].

Company Performance - Canopy Growth Corporation (CGC) closed at $1.19, reflecting a -2.87% change from the previous day, underperforming the S&P 500's daily loss of 0.06% [1] - Over the past month, shares of Canopy Growth have decreased by 27.81%, while the Medical sector has lost 0.79% and the S&P 500 has gained 1.99% [1] Earnings Estimates - The upcoming earnings release for Canopy Growth is projected to show an earnings per share (EPS) of -$0.03, which represents a 96.05% increase from the same quarter last year [2] - Revenue is estimated to be $50.59 million, indicating a 5.34% decline compared to the corresponding quarter of the previous year [2] Full Year Projections - For the full year, the Zacks Consensus Estimates project an EPS of -$0.21 and revenue of $199.68 million, reflecting changes of +92.95% and +3.3% respectively from the prior year [3] - Recent changes to analyst estimates suggest evolving short-term business trends, with positive revisions indicating analyst optimism regarding the company's profitability [3] Zacks Rank and Industry Performance - Canopy Growth currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining unchanged over the last 30 days [5] - The Medical - Products industry, which includes Canopy Growth, has a Zacks Industry Rank of 162, placing it in the bottom 34% of over 250 industries [6]

Industry Overview - The cannabis industry is projected to reach new heights by 2026, driven by increased partnerships and consumer demand, alongside a favorable political climate in the US [1][3] - Positive speculation surrounds the cannabis sector for 2026, suggesting potential growth in marijuana stocks [1] Company Performance - Tilray Brands, Inc. reported a record Q2 fiscal 2026 net revenue of $218 million, indicating a strong financial position and reaffirming full-year adjusted EBITDA guidance [6][7] - Canopy Growth Corporation has taken steps to recapitalize its balance sheet, extending the maturity dates of all outstanding debts to January 2031, which positions the company for future growth [11][12] - Village Farms International, Inc. has entered the Dutch cannabis market by launching 10 new product offerings through its subsidiary Leli Holland [14] Investment Opportunities - Key marijuana stocks to watch for potential investment returns include Tilray Brands, Inc. (NASDAQ: TLRY), Canopy Growth Corporation (NASDAQ: CGC), and Village Farms International, Inc. (NASDAQ: VFF) [8]