Canopy Growth Corp (NYSE:CGC) shares have pulled back following the actual news of full recreational legalization of cannabis in Canada, as suggested they would. All stocks in the cannabis space were run higher into that event, and it’s perfectly natural for traders to monetize those gains following the news. That creates a “shopping list” possibility into the pullback, and CGC is a stock that you might want to have on the radar at this point.
The company is probably the most aggressively strategically diversified (through its strategic investment in its spun-off Canopy Rivers vehicle), and has collected the most impressive interest from “above”, which just now closed: Specifically, the company just announced, along with Constellation Brands, Inc., the closing of Constellation’s $5 billion CAD ($4 billion USD) investment in Canopy Growth, which was previously announced on August 15, 2018.
Canopy Growth Corp (NYSE:CGC) approved the transaction (by an overwhelming majority of shareholders), and the transaction has been granted all required regulatory approvals, including by the Canadian government under the Investment Canada Act. In other words, it is now “money in the bank”.
The next big cannabis story to hit North America is Phoenix Life Science International (PLSI), traded in the US, but with the largest global production based in the tropics and a license to distribute worldwide. Take a look at Phoenix Life Science International PLSI), Its currently trading under $18 dollars per share on the OTC markets. Learn More Now!
So, the question arises: how will this massive capital infusion be deployed?
According to the company, it provides Canopy Growth with “significant funding needed to build scale in the more than 30 countries currently pursuing federally permissible medical cannabis programs, while establishing the foundation needed to supply new recreational adult-use markets as cannabis becomes legal in markets around the world.”
In other words, the company isn’t thinking about getting ahead for the next few quarters. It’s thinking about a dynasty in a world where country after country may eventually make the same decision that Canada just did.
It’s looking to lay down an infrastructure.
What does that mean? It means the roll-out of headlines related to legislation on cannabis outside of North America may start to become the principal driver for this stock.
In addition, because this is a commodity market, and because CGC is headed for being one of the biggest producers of that commodity, base prices for cannabis will fluctuate, which will become a bigger and bigger factor in how the stock trades.
However, as noted above, because the company is so strategically diversified, it may have a cushion that other producers don’t have when raw cannabis prices fall.
As the Crow Flies
Canopy Growth Corp (NYSE:CGC) engages in growing, possession, and sale of medical cannabis in Canada. Its products include dried flowers, oils and concentrates, softgel capsules, and hemps.
According to its own materials, the company offers its products under the Tweed, Black Label, Spectrum Cannabis, DNA Genetics, Leafs By Snoop, Bedrocan Canada, CraftGrow, and Foria brand names. It also offers its products through Tweed Main Street, a single online platform that enables registered patients to purchase medicinal cannabis from various producers across various brands.
In the company’s words, “Canopy Growth is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time.”
This is also one of the most geographically diversified players in the cannabis space, with operations in 12 countries across five continents.
And there has been plenty of PR work here. The Company is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the public’s understanding of cannabis, and through its partly owned subsidiary, Canopy Health Innovations, has devoted millions of dollars toward cutting edge, commercializable research and IP development. Through partly owned subsidiary Canopy Rivers Corporation, the Company is providing resources and investment to new market entrants and building a portfolio of stable investments in the sector.
One of its most important divestitures and strategic interests is Canopy Rivers Inc., a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. The company works collaboratively with Canopy Growth to identify strategic counterparties seeking financial and/or operating support.
The company has developed an investment ecosystem of complementary cannabis operating companies that represent various segments of the value chain across the emerging cannabis sector. As the portfolio continues to develop, constituents will be provided with opportunities to work with Canopy Growth and collaborate among themselves, which the company believes will maximize value for its shareholders and foster an environment of innovation, synergy and value creation for the entire ecosystem.
Canopy Growth Corp (NYSE:CGC) generated sales of $25.9M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 13.6% on the top line.
Pushing the barriers for global distribution, Phoenix Life Science International (PLSI) is the next cannabis play. Just think Canopy x 100, that is how big their plantation in the tropics will be. No lights, no green houses, just maximum growth + minimal cost = home run. Learn More Now!
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