During the last year, we have consistently covered how research analysts at broker-dealers have been lowering price targets and ratings on Canadian Licensed Producers (LPs). (article originally appeared on Technical420)

These changes have been primarily related to lowering sales expectations, shirking profit margins, and rising net losses. In the near future, we do not expect any changes to the current trend in Canada as analysts have lowered sales forecasts by hundreds of millions of dollars for Canadian cannabis producers. 

In recent years, the landscape of the Canadian cannabis industry has changed and the market has become much more competitive. Companies have been lowering the prices of cannabis products to try to capture market share and this trend has created several ripples that have negatively impacted some of the largest Canadian LPs. 

According to leading cannabis analytics firm Hifyre, Canopy Growth Corporation (TSX: WEED) (Nasdaq: CGC) and Aurora Cannabis Inc. (TSX: ACB) (Nasdaq: ACB) have been especially impacted by the change in the market conditions in Canada. For the calendar quarter that ended on December 31st, Canopy Growth’s market share fell to 8.6% from 10% in the prior quarter. For Aurora Cannabis, its market share fell to 2.8% from 3.7% in the previous quarter.

Small Changes in Market Share Creates Major Ripples 

For an industry that generates billions of revenue per year, a small change in market share will have a significant impact on any company. When it comes to Canopy Growth and Aurora Cannabis, the market has punished the stocks and we would not be surprised to see additional changes to the leadership team if the trend does not change this year. (read entire article on Technical420)