Canadian cannabis companies won’t turn a profit in the coming quarter and here’s why

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Canadian cannabis companies, still struggling to show a profit, are unlikely to deliver one in their coming quarterly earnings, in more bad news for hard-hit stocks after a stretch of weaker share prices. CIBC analyst John Zamparo this week pared back his firm’s stock price projections for the sector. The roughly 25% decline as measured by sector ETFs over the past three months is the result of continued losses from Canadian cannabis companies, the dearth of institutional investors in the space, and the realization that U.S. legalization appears unlikely until at least next year, Zamparo said. “Recent negative sentiment [is] a product of deferred U.S. legalization and lack of Canadian profitability,” he said. “We are reducing the price targets across our cannabis coverage universe to reflect more moderate valuation multiples as a result of elusive profitability.” CIBC trimmed its price targets for Canopy Growth Corp CGC,
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