Last summer, the survival of Canopy Growth was in doubt. This week, the Canadian cannabis company watched its stock rise by about 114%.
On Friday, Germany passed a measure decriminalizing possession and home cultivation of cannabis, starting on April 1. The measure won final passage in the Bundesrat, the upper chamber of Germany’s parliament, after some uncertainty.
“The removal of narcotic status for cannabis is expected to accelerate growth of the German medical cannabis market,” the company said in a statement.
Canopy, whose stock rose nearly 36% on Friday upon the news, owns the Germany-based vaporizer firm Storz & Bickel, giving it exposure to Europe’s largest economy. It also offers medical cannabis products through its Canopy Medical unit.
The Friday rally added to an earlier one sparked by U.S. President Joe Biden’s State of the Union address on March 7, in which he mentioned the rescheduling of cannabis. Vice President Kamala Harris followed up by saying marijuana’s “absurd” Schedule I classification—which includes heroin and LSD—should be rescheduled “as soon as possible.”
Other cannabis firms, including Tilray Brands and Cronos, also jumped after the news from Germany.
Low times
Last summer, things looked far bleaker for Canopy. In late June, Benchmark analyst Mike Hickey slashed the price target on the company to zero, saying it “may not be able to continue operations and meet its financial obligations.” At the time, Canopy shares had fallen 78% for the year, and the company had acknowledged a going concern risk in its annual report.
Benchmark wasn’t alone in warning about Canopy’s prospects. CIBC Capital Markets analyst John Zamparo wrote that the company was “burning cash despite multiple cost-cutting programs,” adding that even the U.S. legalizing marijuana, if it happened, would be “no savior.”
In February last year, Canopy cut its workforce by 60%. CEO David Klein cited competition from Canada’s black market, which he estimated accounted for 40% of the nation’s cannabis sales.
“Today, there are two very different cannabis markets in Canada,” he said at the time. “One that’s legal, highly taxed and regulated, and one that’s thriving and illicit.”
Canada legalized the use of recreational marijuana in 2018, the same year that beer-and-wine giant Constellation spent $3.8 billion for a 38% stake in Canopy. That deal sent Canopy’s market valuation soaring, putting it in the same league as plane maker Bombardier.
Disappointment and uncertainty followed, but Canopy appears to be on steadier ground now.
This story was originally featured on Fortune.com
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