As we see it, Canopy Growth Corp (NYSE:CGC) would make a great pair trade if paired with a short position in TLRY. The stock is perhaps rich, but hardly as rich as TLRY. It is also quite well-positioned in terms of a diversified strategic investment portfolio – probably second best on the planet in that respect to Aurora. Now, Canopy has set another first in place.
To wit: The company just announced it has completed a legal transfer of cannabis products to a research partner in the United States. According to the release, “To the Company’s knowledge, this transfer is the first export of legal cannabis products from Canada to the United States pursuant to an import permit issued by the federal United States Drug Enforcement Administration (DEA). The shipment was completed for the sole purpose of supporting medical research and development.”
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.
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.
The company was formerly known as Tweed Marijuana Inc. and changed its name to Canopy Growth Corporation in September 2015. Canopy Growth Corporation is headquartered in Smiths Falls, Canada.
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.
The Company has operations in 12 countries across five continents. 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.
To Boldly Go
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.
We know this is an extremely intensive business in terms of cash from operations, which makes it unsurprising that the company has a strong balance sheet, with cash and marketable securities ($659.8M) far exceeding current obligations of $130.6M.
As we discussed in our introductory section, CGC just announced it has completed a legal transfer of cannabis products to a research partner in the United States. In terms of the action, shares of the stock have powered higher over the past week, rallying roughly 7% in that time on strong overall action.
And those gains have come on surging volume, with interest rising nearly 200% relative to its longer-term transaction volume averages. In other words, the spotlight is heating up in front of Canadian adult-use legalization.
“The United States presents a unique market opportunity and as the most established cannabis business in the world we, in turn, offer a unique ability to advance standardization, IP development, and clinical research that can improve the understanding and legal application of cannabis and cannabinoids,” said Mark Zekulin, President and Co-CEO, Canopy Growth. “By engaging in the market through federally legal means and with the right partners, we can create a US-based centre of expertise while also supporting our rapidly expanding global business.”
Moreover, it’s not surprising to see Canopy finding an advantaged market position once again.
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