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    Canopy Growth (TSX:WEED) Is Down 11.3% After U.S. Cannabis Rescheduling And Debt Cut Moves – Has The Bull Case Changed?

    Simply Wall St·12/22/2025 18:13:14
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    • Earlier this month, U.S. President Donald Trump signed an executive order reclassifying cannabis from Schedule I to Schedule III, while Canopy Growth reported narrowing adjusted EBITDA losses, eliminated going‑concern warnings, and prepaid US$50 million on a senior secured term loan to cut interest costs.
    • At the same time, Canopy Growth advanced its Canadian footprint with an agreement to acquire Quebec-based MTL Cannabis and continued to benefit from a more supportive U.S. regulatory backdrop that could ease tax and banking constraints for cannabis operators.
    • Next, we’ll examine how U.S. cannabis rescheduling and Canopy’s improving balance sheet could reshape its high-risk, turnaround investment narrative.

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    Canopy Growth Investment Narrative Recap

    To own Canopy Growth today, you have to believe its cost cuts, debt reduction and tighter focus can eventually turn a volatile cannabis operator into a sustainable business, while U.S. rescheduling becomes a real profit driver rather than just a sentiment boost. The biggest near term catalyst is U.S. cannabis moving to Schedule III, which may ease tax and banking pressures, but the key risk remains ongoing operating losses that could keep balance sheet and dilution concerns front and center.

    Among recent announcements, the US$50 million prepayment on Canopy’s senior secured term loan stands out, because it directly targets interest costs and liquidity pressure at a time when the market is re-rating U.S. cannabis exposure. Pairing lower financing costs with a potentially more supportive U.S. regulatory framework is central to any turnaround case, but it does not remove the uncertainty around achieving consistent positive EBITDA.

    Yet investors should also be aware that even with rescheduling progress, the risk of further dilution and unresolved legal overhangs remains...

    Read the full narrative on Canopy Growth (it's free!)

    Canopy Growth's narrative projects CA$343.7 million revenue and CA$4.1 million earnings by 2028. This requires 7.7% yearly revenue growth and about a CA$520.6 million earnings increase from CA$-516.5 million today.

    Uncover how Canopy Growth's forecasts yield a CA$3.30 fair value, a 62% upside to its current price.

    Exploring Other Perspectives

    TSX:WEED 1-Year Stock Price Chart
    TSX:WEED 1-Year Stock Price Chart

    Members of the Simply Wall St Community currently see fair value for Canopy Growth between C$3.30 and C$8.00 across 2 different views, highlighting how far opinions can spread. Against that wide range, the company’s ongoing losses and past dilution mean readers may want to weigh upbeat regulatory catalysts against the financial risks to longer term performance.

    Explore 2 other fair value estimates on Canopy Growth - why the stock might be worth just CA$3.30!

    Build Your Own Canopy Growth Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.