Why Canopy Growth Corp (TSX:WEED) Is Still Top of the Class

Canopy Growth (TSX:WEED)(NYSE:CGC) has been one of the biggest winners of the recent explosion of the cannabis market. The company’s share price has increased at a dizzying pace over the past five years.

Canopy is now the biggest pot company in the world by market cap, and with a high production capacity, about 30% of the domestic market share, and strong international operations, it is hard to bet against the marijuana giant. Canopy recently made several moves that are likely to keep investors’ enthusiasm high. Let’s see what the Ontario-based pot grower has been up to.

Updated guidance

Canopy made headlines last week during the GMP Securities cannabis conference in Toronto. The CEO of the company — Bruce Lipton — announced the acquisition of the Spanish cannabis company Cafina. This acquisition bolsters Canopy’s international presence, which is already very strong compared to that of most of its peers. But that wasn’t it for Canopy.

The company also announced an updated guidance that left investors licking their fingers. According to the CEO, Canopy expects at least $744 million in revenues during the current fiscal year, which is much higher than most analysts’ estimates.

While the company likely won’t be profitable yet, choosing to continue aggressively pursuing expansion projects, Canopy’s revenue is a strong indication of its current place in the cannabis industry. During the last quarter, the Ontario-based firm was second to none in terms of sales, beating its closest rival by about $30 million.

Another acquisition

Canopy made yet another move last week. The company is reportedly on the verge of acquiring Acreage Holdings, one of the largest vertically integrated cannabis company in the U.S. Despite marijuana still being illegal at the federal level south of the border, the U.S. is the largest cannabis market in the world.

While the hemp market suddenly became more attractive last year once legislation was passed that made it legal (and Canopy plans on entering said market via a licence it acquired in New York), acquiring a well-established cannabis company operating in the U.S. would be an even better way for Canopy to dip its toes in the water. Shares of Canopy jumped by as much as 10% on the heels of its potential deal with Acreage Holdings.

Should you buy?

Canopy looks increasingly likely to be the dominant force in the marijuana market for years to come. In addition to its strong domestic and international operations and high production capacity, the company is now looking to enter the U.S. market in a big way. If this deal pans out, Canopy’s share value will likely reach new heights.

Let’s not forget the firm’s secret weapon: boatloads of cash to fund its growth via its partnership with Constellation Brands. Unlike some of its competitors, Canopy no longer has to rely on dilutive forms of financing to expand its production capacity or make new acquisitions. Canopy is already up by more than 50% this year. There is likely more coming, and now may be a good time to jump on the bandwagon.

Forget Apple! Buy This TSX Stock Instead…

There’s something crucial you need to know about Apple’s stock today, especially if you already own it, know someone who does, or have even thought about buying it.

This revolutionary new technology involved in “Project Titan” should make any investor’s ears perk up.

But you may want to consider investing in a TSX-traded company that’s poised to have a drastically larger role in this new tech, and yet is less than 1% the size of Apple.

Discover why we’re especially excited about this tech opportunity for Canadian investors like yourself.

Click here to learn more!

More reading

Fool contributor Prosper Bakiny has no position in any of the companies mentioned. 

Source: The Fool
Why Canopy Growth Corp (TSX:WEED) Is Still Top of the Class
The Fool

The Motley Fool
Contributor for investorsnews.ca
The Motley Fool is dedicated to helping the world invest — better. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, mutual funds, and premium investing services.

In all we do, we take a different approach.

We believe – and have proven over decades – that the individual investor can beat the market.

We believe that anyone can do it, even if they don’t have a lot of time or money to devote to investing.

We believe in a long-term outlook, helping people build wealth over time.

We believe that the person best positioned to take care of your financial future is you.

And we work tirelessly on behalf of our hundreds of thousands of members who are enjoying the opportunities that come with having enough money to do the things that matter to them.

While we are headquartered in Alexandria, Va., The Motley Fool advocates for the individual investor around the globe with offices in the UK, Australia, Canada, Singapore, and Germany.

Related posts