Earlier this year, there was considerable interest in cannabis stocks due to optimism about the possible policies of the Joe Biden administration regarding the sector.
One of the cannabis companies to have come into focus at the time was Sundial Growers (NASDAQ:SNDL). The stock consequently delivered gains but in recent times the Sundial stock has been in terminal decline and there seems to be no way of arresting the slide. The stock is currently trading below $1 a share and on top of that, there is no actual case to be made with regards to Sundial’s business plans either.
Back in February, the stock had hit a high of as much as $4 a share and that completed a period in which the Sundial stock rallied by an astonishing 607%. However, it is necessary to note that the rally was largely driven by retail investors from Reddit who had short squeezed the stock and sent it higher.
It was around the same time that other distressed companies like GameStop and AMC Entertainment Holdings among others also experienced major spikes in their stocks. As the retail investors moved on to other stocks and cryptocurrencies, the interest waned in Sundial and the stock was eventually dumped after enormous profits had been booked.
A look at the company’s performance in the first fiscal quarter of 2021 is an indication of how poorly Sundial has been doing as a business. The net revenues in the first quarter came in at C$9.9 million, which reflected a sequential fall of 29% and on the other hand, the company also suffered losses of as much as C$134.4 million.
In order to correct the freefall in its business the company is looking to cut down on the number of products it sells and instead focus on premium products. Sundial is also on the verge of completing the acquisition of Inner Spirit Holdings, which is best known for operating cannabis retail outlets named Spiritleaf. However, at this point, investors might consider waiting for any kind of turnaround before considering Sundial.
