What happened Shares of Sundial Growers (NASDAQ: SNDL) fell 15% last month, according to data provided by S&P Global Market Intelligence, after the cannabis company moved to further dilute shareholders and an analyst issued a dire forecast for its stock. So what Canaccord Genuity analyst Shaan Mir cut his rating on Sundial from hold to sell on March 19. Mir placed a $0.65 price target on the marijuana stock, representing potential losses for investors of roughly 55% from its price at that time. Mir's bearish forecast came after Sundial's fourth-quarter financial report, which saw its net revenue fall 6% year over year, to 13.9 million Canadian dollars ($11 million). Sundial Growers' stock price has pulled back violently in recent weeks. Image source: Getty Images. Investors were also displeased when Sundial filed a prospectus that would allow it to sell up to $800 million worth of new stock. Sundial noted in the filing that its shares had risen sharply in recent months despite "no recent change in our financial condition or results of operations," which may have prompted some shareholders to reevaluate whether the move was justified. Investors were also no doubt disconcerted by the potential for their ownership stakes to be significantly diluted by new share offerings. Now what Despite its recent decline, Sundial's stock price is still up more than 130% so far in 2021. Investors appear to be pricing in a successful transition from primarily wholesale cannabis sales to higher-margin branded retail products, as well as management's ability to make value-creating investments with Sundial's sizable cash reserves. Sundial has made significant progress with its retail transition; branded net cannabis sales rose to 75% of its total cannabis sales last year, up from 20% in 2019. Yet whether management can deploy shareholders' capital in a manner that will more than offset the dilution brought about by Sundial's large stock sales remains uncertain. 10 stocks we like better than Sundial Growers IncWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Sundial Growers Inc wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of February 24, 2021 Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source