Canopy: Shares Fall as It Uses Massively Dilutive Equity Issuance to Deal with Maturities

On July 14, no-moat Canopy Growth announced a series of transactions to deal with the CAD 468 million due this fiscal year. As we had expected, the company is using a mix of cash and massively dilutive equity issuances to deal with the debt that is set to mature. Our fair value estimates of $0.80 and CAD 0.90 per share remain unchanged. Though this sits above the current share price, we reiterate our Extreme Uncertainty Rating, largely reflecting the risk of value destruction.