Canopy Growth Requests S&P To Withdraw Its Credit Ratings
S&P claimed that the Canadian cannabis company made the decision to remove all of its ratings from the company, including its long-term issuer-credit rating for "selective default," which it defined as failing to make one or more of its financial obligations when they were due.
Following the cannabis company's move to modify a 2022 credit arrangement, Canopy Growth Corp. (TSX: WEED) requested that S&P Global Inc. withdraw its credit ratings.
On its long-term issuer credit, the New York-based ratings and research group had previously assigned Canopy a "selective default" rating, signifying the company has failed to make timely payments on one or more of its financial obligations.
About Canopy Growth
Canopy Growth Corporation (TSX: WEED, NYSE: CGC), is a Canadian firm. It is one of the largest cultivators and distributor of cannabis in the world.
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It was established in 2013. Its main office is in Smiths Falls, Ontario. Canopy Growth is renowned for its comprehensive strategy for the cannabis market.
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It encompasses the production, distribution, and cultivation of cannabis products for both medical and recreational. The company sells various items including dried flowers, oils, extracts, edibles, and beverages.
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Canopy Growth, a pioneer in the cannabis sector, had a major impact on the development of the Canadian legal cannabis market.
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It operates under a number of subsidiary names, including Tokyo Smoke, DNA Genetics, Spectrum Therapeutics, and Tweed, among others. These companies target a wide range of consumer tastes and serve to various market sectors.
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Additionally, Canopy Growth has been actively extending its business activities abroad. It has collaborated and formed partnerships in a number of nations in order to create and export cannabis goods internationally.
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The business has also added strategic acquisitions to expand its product lines and market reach.
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Notably, in 2019 Constellation Brands, Inc., a major alcoholic beverage corporation, made a sizeable investment in Canopy Growth, further solidifying its position in the market.
About Constellation Brands, Inc.
Constellation Brands, Inc. (NYSE: STZ), is a leader in the alcoholic beverage sector. It produces and markets alcoholic beverages throughout the world. It was founded in 1945.
Its headquarters are located in Victor, New York. Constellation products, which operates via a number of different businesses, provides a wide variety of premium beer, wine, and alcohol products.
Corona, Modelo Especial, Pacifico, Robert Mondavi, Kim Crawford, Meiomi, Svedka Vodka, Casa Noble Tequila, and High West Whisky are just a few of the well-known brands held by Constellation Brands.
These companies have a substantial presence in both home and foreign markets and cater to a variety of consumer tastes. Within the alcoholic beverage sector, Constellation Brands is renowned for its strategic collaborations and acquisitions.
About S&P
S&P Global Inc. is a well-known American company that provides financial information and analytics. It was founded in 2016 as a result of Standard & Poor's and McGraw Hill Financial joining forces. In the American city of New York, the corporation is headquartered.
S&P Global operates across a number of industries and offers crucial information, statistics, ratings, and research to individuals, corporations, and financial professionals.
S&P Global Ratings: This department is renowned for its research and credit rating services. It evaluates the creditworthiness and risk profile of financial instruments, governments, and businesses.
Bonds, structured finance products, sovereign debt, and other financial instruments are all rated by S&P Global Ratings.
Canopy Growth Requests S&P To Withdraw Its Credit Ratings
S&P Global, based in New York, reported that Canopy Growth made the decision to remove all of its credit ratings from the company, including ratings that show if the business failed to meet one or more of its financial obligations.
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Although it is optional in Canada, the majority of businesses keep credit ratings from at least two agencies.
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Based on prior interactions, a credit rating provides an estimation of a person's or company's capacity to satisfy their financial commitments and repay debt.
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Canopy Growth presently has a low CCC- rating from Fitch Ratings, which downgraded the Smiths Falls, Ontario-based marijuana business in October after concluding that its relationships with Constellation Brands (STZ), its largest investor, had gotten worse financially.
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Canopy Growth has asked S&P Global to revoke its credit ratings since the business has submitted multiple quarterly financial reports from 2022 after inadvertently overstating sales of its BioSteel sports drink.
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Originally set to release its fiscal 2023 financial results in may, Canopy Growth has announced that it will not do so because refiling its 2022 financial statements takes precedence.
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The share price of Canopy Growth has dropped by 80% over the past year and is at $1.23.
NASDAQ CGC
Canopy Growth Corporation's (TSX:WEED, NYSE:CGC) shares are removed from the S&P/TSX Composite Index, Canada's version of the S&P 500, would deal another blow to the Canadian cannabis business.
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The decision, which S&P Dow Jones Indices revealed on Friday, highlights Canopy's persistent difficulties.
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Securities must maintain a minimum float-adjusted market capitalization in order to be included in the S&P/TSX Composite Index. Unfortunately, both the market capitalization and share price have dropped significantly for canopy.
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Prior to the start of the Toronto Stock Exchange on June 19, Canopy's removal from the S&P/TSX Composite Index will take effect.
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Following in the footsteps of several other cannabis businesses that had to restate their quarterly reports, Canopy recently revealed preparations to refile financial statements for the last fiscal year.
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In February, the corporation also began massive layoffs and the closure of a big factory.