Canadian marijuana producer Sundial Growers (NASDAQ:SNDL) has surged by a robust 73% since the start of the year. The credit goes to stock mania due to the notorious WallStreetBets forum on Reddit.
The firm has taken benefits of this through the offerings for protecting its finances but currently, no major growth catalysts exist for the SNDL stock, making it a less attractive bet in the surging marijuana space.
Sundial had a bad year in 2020 due to crippled margins and significant loss in sales. In the last three quarters, its YOY incomes have dropped by double-digit percentages. The firm is looking at ditching oversupplied wholesale channels for focusing on retail sales.
The Canadian marijuana producers have not succeeded in the past few years with performance and the industry holistically has been behind the expectations vis-à-vis the U.S. marijuana market.
Even though Sundial does not want cash currently, its management will ensure stock offering rises once more. In December, the company’s cash balance of 60 million CAD, and the firm has given up its money entirely to run operations.
The company had announced a share offering of Canadian dollars 95 million in February and the firm was swift on acting on the retail trading frenzy.
Investors are concerned about whether the amount is sufficient. There is a need to ameliorate top and bottom lines even as it acquired Inner Spirit, a franchise operator of recreational cannabis with a robust footprint in Canada.