Why is the Cann (ASX:CAN) share price tumbling today?

The Cann Group (ASX: CAN) share price is down 2.2% following a revised revenue guidance for FY21. We take a closer look.
The post Why is the Cann (ASX:CAN) share price tumbling today? appeared first on The Motley Fool Australia. –

The Cann Group Ltd (ASX: CAN) share price is falling during morning trade. This follows the cannabis company’s announcement of a revised revenue guidance for FY21.

At the time of writing, Cann shares are exchanging hands for 43 cents, down 2.27%.

What’s dragging the Cann share price down?

Investors are selling off Cann shares today after digesting the company’s update.

In today’s release, Cann advised that a number of delays have affected its revenue guidance for FY21.

In particular, third-party manufacturing and starting material supplier issues have pushed back its shipping schedule. This means that customers will receive Cann products at a later date than originally expected, resulting in deferred revenue receipts.

The company also noted that its international regulatory submissions to enter new markets has been extended. This relates to both local and overseas market clearances. However, Cann is working hard to have its order and fulfilment cycle more streamlined, especially to Germany.

As a result, Cann is forecasting revenue to fall between $4 million and $5 million for FY21. This compares to its earlier revised guidance projections of $8 million to $10 million on 15 February. The remaining balance of the latter revenue assumption is expected to roll into FY22.

At the end of April, the group dispatched more than 20,000 bottles of cannabis extract to its German customer and partner, iuvo Therapeutics. Those products have since been GMP-released for sale, with the company stating that initial sales look promising.

Furthermore, its United Kingdom market is tracking along nicely, with a pipeline of orders scheduled in FY22.

Words from the CEO

Cann group CEO Peter Crock touched on the company’s performance, saying:

We have continued to make really important headway this year, and while timelines have been frustratingly drawn out, in some part due to COVID, the achievements we have made in securing regulatory pathways, and the foundations we have set for supply to Australian patients and export markets stands us in good stead.

We have also strengthened our future revenue base with the recent acquisition of Satipharm and access to an important differentiated technology platform. Further, we have demonstrated an ability to deliver sizable orders to our customers, as shown by our delivery to iuvo last month.

Cann shares have been on a steady decline over the past 12 months, shrinking in value by more than 60%.

Learn where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

Cann (ASX:CAN) share price continues to rise despite product recall

The post Why is the Cann (ASX:CAN) share price tumbling today? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!