In case you haven’t paid attention, the cannabis industry is slowly turning into a massive business right before our eyes. The industry generated almost $12.2 billion in sales last year across the globe.
Investors have pot stocks on their sights now, and one name that will surely stand out is Canopy Growth Corp (NYSE: CGC).
Canopy Growth Corp. is, at the moment, the world’s largest medical marijuana company operating 10 licensed cannabis production sites, four Tweed Main Street sites in Ontario, and operates in 11 countries across 5 continents.
Canopy Growth Corp Price Analysis
It would be safe to say that CGC stock has indeed remained range bound (between $40 and $50) since the end of January. However, there’s a reason to believe that CGC stock could break out in the Q2 of the year.
For instance, the busy M&A month of April, as well as the progress in the tuck-in investments, could be catalysts driving the stock higher. Currently, CGC stock is priced at $46.87.
Canopy Growth Corp Overview
The company is world-leading diversified marijuana and hemp as well as offers distinct brands and curated marijuana varieties in dried, Softgel capsule, and oil forms. Also, it provides medically approved vaporizers via the company’s subsidiary, Storz & Bickel GMbH & Co. KG.
The firm also focuses on producing as well as selling cannabis in the recreational market in Canada. The core brands are Tweed and Bedrocan.
CGC Stock’s Developments
Like most pot stocks, CGC started the year with a bang taking a breather in April. It was among the big winners gaining at least 15% last month.
But the gain didn’t come easy. Canopy Growth had to dig deep with several developments already taking place.
The Canopy-Acreage Deal
The company has been aggressively adding to its capacity and boasts the most enviable cash. Last month, Canopy announced a massive $3.4 billion conditional buyout of the US cannabis producer Acreage Holdings (OTCMKTS: ACRGF).
The agreement involves CGC paying $300 million in cash up front and the remaining being financed with the company’s stock. A thing worth noting is, the deal is not valid until the US federal government legalizes pot.
At the moment, most investors viewed the deal as a significant win whereby Canopy has stated that getting into the US is the priority.
Was that the reason why the stock jumped 16.5%?
Last month, the shares of Canopy Growth gained 16.5%, and in general, they are up a whopping 82.7%. But yes, experts believe, the main catalyst was the announcement of the Acreage Holdings deal.
Again, Constellation Brands (NYSE: STZ)
Canopy’s partnership with the alcoholic beverage giant Constellation Brands gives it a competitive advantage, thanks to the $4 billion received from Constellation. Their partnership is to develop Cannabidiol (CBD)-infused beverages that are expected to be legal in Canada at some point this year.
Furthermore, Canopy plans to use the small fortune in making complementary acquisitions, broadening the product portfolio as well as enter the lucrative U.S. market.
In January, the company was also awarded a hemp production as well as processing license in New York State. Also, it announced plans of investing $150 million in developing a processing plant in the Empire State.
In short, Canopy Growth Corp plans to remain very aggressive with its cash hoard.
For any investor looking for exposure to a fast-growing cannabis space, Canopy Growth stock should undoubtedly be on the watch list. The stock’s valuation is undoubtedly sky-high, and with much growth already priced in, you should have a long-term outlook.
Therefore, with the slew of announcements about new partnerships, geographical expansion, and new ventures, it should be easily said that it’s showtime for the most extensive pot stock in the world.
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Disclosure: We have no position in any of the securities mentioned and have not been compensated for this article.
Forget APHA and ACB, Buy GTBIF and TCNNF
There are a lot of misconceptions going on when it comes to US legalization. Many investors are buying Aphria (APHA) and Aurora Cannabis (ACB) hoping to bank on what’s happening in the US. However, they are Canadian Licensed Producers and have no business in the US. Investors are buying them because they trade on the major exchanges, but that is the wrong move. The correct move is to buy the US multi-state operators like Green Thumb Industries (GTBIF) and Trulieve Cannabis (TCNNF).
On Election Day voters in New Jersey, Arizona, Montana and South Dakota voted to legalize recreational marijuana. South Dakota and Mississippi voters also approved measures to legalize medical marijuana.
There’s also the prospect of a more pot-friendly White House with President-elect Joe Biden. Vice Presidential Candidate Kamala Harris said at the debate a Biden administration would decriminalize marijuana at a federal level and expunge criminal records of people with marijuana-related offenses.
Green Thumb Industries Inc. (“Green Thumb”), a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis while giving back to the communities in which it serves.
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OTCMKTS:DECN Price Analysis
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Before we delve into the details, here is a brief profile of CytoDyn for those investors who may have just come across this company for the very first time.
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