Out Fox The $treet

Canopy Growth remains locked out of the major cannabis opportunities in the U.S. The Acreage deal is failing due to a lack of funding for the MSO. The company is still aggressively spending chasing smaller global opportunities in competitive markets. The stock is far overvalued here with a $6.5 billion valuation, over 16x FY21 sales estimates. On June 22,  Canopy Growth  ( CGC ) hosted a virtual investor meeting where the company discussed the future of cannabis in great detail. Whether intentional or not, the large Canadian cannabis company highlighted how the business model continues to waste too much money chasing the wrong markets. My  investment thesis  remains highly negative on the stock here with a market cap of nearly $6.5 billion and a long road to profits ahead. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. Update 6/25 Canopy Growth just modified the deal...

Acreage offers a path to owing double the current position of Canopy Growth while offering a better valuation. The Acreage/Canopy Growth deal signaled a peak in the market while the ensuing collapse might signal the bottom. Acreage offers a solid standalone value assuming the deal never closes. The decision for  Canopy Growth  ( CGC ) to pay $300 million for a call option to purchase  Acreage Holdings  ( OTCQX:ACRGF ) has been a complete disaster. Not only has the cannabis market collapsed, but the stock market doesn't even see the deal closing in a reasonable enough time. Despite all of the mistakes of Canopy Growth, the Canadian cannabis giant has a pristine balance sheet to support future growth and reward shareholders that purchase the stock on the cheap via Acreage. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.

Acreage Holdings is down substantially despite the future merger right from Canopy Growth. The corporate upheaval at Canopy Growth places the merger at risk and raises the prospects of failed math used to consume the deal. Avoid the stock until Canopy Growth gets on stronger financial footing. The  Canopy Growth  ( CGC )  firing  of the founding CEO and the related market ramifications aren't going to help  Acreage Holdings  ( OTCQX:ACRGF ) shareholders. The original merger was heralded as a big premium for Acreage shareholders, but the stock hasn't  fared well and the risk is to the downside unless the merger dissolves. Read the full article at Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.