Fitch Ratings downgraded Canadian cannabis producer Canopy Growth to CCC, the agency’s fifth-lowest rating, and warned of potential further negative actions.
Fitch’s CCC rating carries substantial credit risk with a “very low margin for safety” and a “real possibility” of default, per the agency’s ratings scale.
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Canopy was previously rated B-, or highly speculative.
Fitch said the downgrade reflects:
Significant market-share losses in the Canadian cannabis market. Execution missteps. Challenges pivoting its cultivation strategy.
“As a result, it is highly doubtful that Canopy can improve EBITDA trends to reach operating cash flow breakeven in fiscal 2025 (by March 31, 2025) as Fitch previously expected, and creates greater uncertainty around capital structure sustainability,” Fitch noted in its commentary on the ratings action.
Canopy’s financial year ends March 31.
The credit-rating agency said it could cut Canopy’s rating again if:
Canopy displays a lack of execution on
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