(Reuters) -Pot producer Canopy Growth said on Thursday it has completed the sale of its facility in Modesto, California as part of its divestitures to raise funding amid liquidity concerns.
The sale, the fifth such deal since April 1, is part of Canopy’s ongoing efforts to improve liquidity by reining in costs through layoffs, exits from some international markets and store closures.
The company has generated proceeds of C$81 million ($61.10 million) through these transactions and expects C$150 million in total proceeds from facility divestitures by the end of September 2023.
“The proceeds from this transaction further the achievement of our target of C$150 million… enabling us to efficiently reduce our overall footprint and strengthen our financial position,” said CEO David Klein.
Canopy’s shares, which have slumped more than 80% this year, have been under added pressure since last week after the company raised ‘going concern’ doubts citing recurring losses from operations and certain debt obligations due in the short term.
The company had said it requires additional funding to continue operations but analysts have questioned the cannabis producer’s ability to reduce cash-burn and turnaround operations. Brokerage Benchmark slashed its price target on Canopy to zero earlier this week.
The company had C$783 million in cash and short-term investments as of March 31, about 43% lower than a year earlier.
Canopy also faces an investigation from the U.S. Securities and Exchange Commission over the reporting of revenue in its BioSteel segment.
($1 = 1.3258 Canadian dollars)
(Reporting by Sourasis Bose in Bengaluru; Editing by Krishna Chandra Eluri)
