Canopy Growth — Cointreau Trademark Battle Ends, Fitch Rating Downgrades Canopy Stock

Last year, French wine maker Remy Cointreau remy Sue Canopy Development Corporation CGC for Alleged trademark infringement on its CBD-infused sparkling water brand Quatreau.

Cointreau (pronounced KWAN’troh) claimed that Canopy used Quatreau, (KWA’troh) to “take off the market dominance and fame of the Cointreau mark”, arguing that the ‘n’ sound only separated the two brands, Spirits. Business previously reported.

The Canadian cannabis giant and its US subsidiary denied 112 of the 115 claims in whole or in part Cointreau and its US subsidiary filed a complaint and sought a jury in October.

Now, according to a filing filed in Manhattan federal court, The France-based maker of Cointreau orange liqueur has settled a trademark dispute, Reuters reported.

Later Both sides asked the court to close the case, a decision dismissed by US Judge Edgardo Ramos on Monday.

details of the case

Cointreau initially accuses Canopy of using Quatreau to “falsely capitalize on the goodwill and reputation of the Cointreau mark,” adding that “(The) the defendant’s intentional action not only deprives consumers of the plaintiff and the Cointreau brand.” but would blur the particular association between plaintiff Cointreau and a source of orange liqueur.”

Canopy, based in Smiths Falls, Ontario, said in a September 21 filing in a New York court that its Quatreau brand “did not infringe any applicable trademark under federal or state law,” and that it was “misleading.” form” is not the same as Cointreau’s trademark and name and has not been diluted.

In addition to asking for benefits, Canopy has sued Canopy over the alleged infringing trademarked products, including court costs and attorneys’ fees, Cointreau accuses Canopy of infringing on its trademarks and any words, words, names, symbols or devices. A permanent injunction has been sought to prevent its use. Any product that is likely to be confusing.

Canopy’s Quatreau launches in the US in March 2021, following its debut in Canada. Shortly after, the Canadian cannabis producer partnered with Southern Glazer Wine & Spirits to distribute its CBD-infused beverages in the US.

The Takes of Canopy’s Financials and Analysts

Meanwhile, Canopy Growth was among the top three Canadian companies to report earnings in May, despite 5% year-over-year decrease in net revenue which was CA$520 million ($408.15 million) in the fourth quarter Ended 31 March 2022.

The company also stated that the adjusted EBITDA in FY 2022 had a loss of CA$415 million, This represents an increase of CA$75 million in adjusted EBITDA loss compared to a year ago. Free cash flow in fiscal year 2022 was an outflow of CA$582 million, which represents an 8% reduction over fiscal 2021 outflow.

Cantor Fitzgerald analyst Pablo Juanic In his recent note it is said that The company’s cost-saving measures and efforts to move away from value in the home recreational business will help the firm reach its target of positive EBITDA in FY 2024. However, he added that “greater clarity on the pace of cash burn” would help the cannabis company.

Fitch Ratings downgrades Canopy Growth, adding that “Highly doubtful that Canopy can improve EBITDA trends to reach operating cash flow breakeven in fiscal year 2025 (as of March 31, 2025). as Fitch previously expected, and creates more uncertainty around capital structure stability,” Marijuana Business Daily reported.

Fitch said their move reflects the loss of substantial market share in the cannabis market in Canada, as well as execution glitches and the challenges surrounding the company’s cultivation strategy.

photo. Source: Image from Shutterstock

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