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Buy Canopy Growth Corp Stock

And progress toward decriminalization or legalization is exactly where a heavily bruised cannabis stock like Canopy Growth (CGC) just might have an opportunity to make a sharp turnaround. But will Canopy be able to recover from its recent collapse, or is it too late for investors to make a profit given its issues with maintaining revenue growth over time?

buy canopy growth corp stock

So there's a chance that rising beverage sales and divesting its Canadian retail business could help to stabilize the decay of the top and bottom lines over the next year. Eventually, that could in turn lead to the stock rising again, though cannabis revenue would probably need to return to growth before that could happen.

In short, there's a chance for Canopy's stock to shoot higher in the near term if legalization advances, and a separate chance that it'll slowly recover even without legalization if its margin and top-line issues abate over time. It isn't too late to invest with the hope of those outcomes catalyzing growth. In the long term, it could become a must-buy cannabis stock if its high-margin products end up gaining traction.

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Canopy Growth (TSX:WEED, NASDAQ:CGC) is a world-leading diversified cannabis and cannabinoid-based consumer product company, driven by a passion to improve lives, end prohibition, and strengthen communities by unleashing the full potential of cannabis. Leveraging consumer insights and innovation, we offer product varieties in high-quality dried flower, oil, softgel capsule, infused beverage, edible, and topical formats, as well as vaporizer devices by Canopy Growth and industry-leader Storz & Bickel. Our global medical brand, Spectrum Therapeutics, sells a range of full-spectrum products using its colour-coded classification system and is a market leader in both Canada and Germany. Through our award-winning Tweed and Tokyo Smoke banners, we reach our adult-use consumers and have built a loyal following by focusing on top quality products and meaningful customer relationships. Canopy Growth has entered into the health and wellness consumer space in key markets including Canada, the United States, and Europe through BioSteel sports nutrition, and This Works skin and sleep solutions; and has introduced additional hemp derived CBD products to the United States through our First & Free and Martha Stewart CBD brands. Canopy Growth has an established partnership with Fortune 500 alcohol leader Constellation Brands. For more information visit

Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including the timeline for federal permissibility in the United States, the integration of the businesses and the ability to achieve the anticipated synergies contemplated by the transaction; inherent uncertainty associated with projections; the diversion of management time on transaction-related issues; expectations regarding future investment, growth and expansion of operations; regulatory and licensing risks; changes in general economic, business and political conditions, including changes in the financial and stock markets; risks related to infectious diseases, including the impacts of the Covid-19 pandemic; legal and regulatory risks inherent in the cannabis industry, including the global regulatory landscape and enforcement related to cannabis, political risks and risks relating to regulatory change; risks relating to anti-money laundering laws; compliance with extensive government regulation and the interpretation of various laws regulations and policies; public opinion and perception of the cannabis industry; and such other risks contained in the public filings of the Company filed with Canadian securities regulators and available under the Company's profile on SEDAR at and with the United States Securities and Exchange Commission through EDGAR at, including the Company's annual report on Form 10-K for the year ended March 31, 2021.

Canadian cannabis companies with high growth potential are down to two following huge financial losses of major players in recent years. If you plan to invest in cheap weed stocks right now, the choice is between Tilray Brands (TSX:TLRY) and Canopy Growth (TSX:WEED) only.

The U.S. cannabis industry is estimated to have a TAM (total addressable market) of more than $50 billion. This presents a huge opportunity for the cannabis stock. Canopy growth will potentially hold the leading market share in the U.S. upon federal approval and unlock significant value for its shareholders.

Could Canopy's growth prospects justify its valuation? Maybe so. The company's market cap is a little over $6 billion. Aurora Cannabis Chief Corporate Officer Cam Battley recently stated that the global marijuana market could be as big as $180 billion in the future. Even if that estimate is overly optimistic by a lot, Canopy Growth could have enough opportunities to make the current stock price much less scary than it seems at first glance -- although not likely enough to entice Buffett.

At the time of publication, Borchardt had no positions in any securities mentioned.","articleImageUrl":"//","isExternalContributor":false,"publishDate":new Date(1601665724000),"primaryAuthorUrl":"/author/2814565/debra-borchardt/all.html","siteName":"Real Money","mediumThumbUrl":"//","leadTicker":"[\"CGC\",\"STZ\",\"ACRHF\",\"ACRDF\"]","categoryName":"","publishDateFormatted":"2020-10-02T15:08:44.000Z","compactPubDate":"3:08 PM","numPages":1,"subcategoryName":"US Equity - RM ","lastPublishDate":"2020-10-02T15:08:44.000-0400","pages":"0":"number":1,"pageTitle":"Here's How to Make Sense of the Canopy Growth, Acreage Deal - RealMoney","isLastPage":true,"body":" If you thought the original Canopy Growth (CGC) and Acreage Holdings (CSE:ACRG.U) deal was confusing, hold onto your hats because the amended deal is a doozy. The two companies recently changed the terms of the original acquisition because valuations have changed dramatically and both of the original leaders are no longer there. Original Deal First, let's start with the original deal. Back in April 2019 (which feels like another lifetime) Canopy Growth said it was acquiring Acreage in a deal valued at $3.4 billion. In actuality, there was no price placed on the deal, but the figure was calculated based on share prices at the time. Once the shareholders and the Canadian Supreme Court approved the deal, Acreage Holders would immediately receive a payment of US$300 million or approximately US$2.55 per Acreage Subordinate Voting Share. While there were many moving parts to this acquisition, the biggest issue was the \"triggering event.\" The acquisition wouldn't take place until the U.S. federally legalized cannabis. This could happen a year from now or five years from now. Perhaps cannabis is only decriminalized and remains a highly scheduled drug? It's a big question mark. Plus, these companies are based in different countries with varying levels of shareholder ownership and voting rights. Add in the inclusion of Constellation Brands (STZ) , which is a major stakeholder in Canopy and it becomes more complicated. Jonathan Sherman and Jamie Litchen, partners at Cassels Brock who acted on the Acreage transaction for Canopy Growth, said at the time, \"Canopy Growth's acquisition of Acreage Holdings is the most complex M&A transaction completed in decades. In this deal, one company has conditionally acquired another to be able to operate outside of a jurisdiction whereby the product or service would be considered legal.\" Deal Excitement Cools The original deal was agreed to by Bruce Linton, who was Canopy's CEO at the time and was very interested in acquiring U.S. assets. However, shortly after Linton was fired from Canopy in July 2019. An unnamed source says that once Linton was out of the picture at Canopy, there was little appetite for the Acreage deal. This is completely understandable as Canopy had its own problems to solve, much less take on a U.S. company and its issues as well. In December 2019, Canopy appointed its new CEO David Klein, who faced a mountain of work ahead of him to navigate the company through an landscape of market right sizing. In 2020, the company has written down millions of dollars in losses and has laid off over 500 employees. It has shuttered two facilities in British Columbia and taken a loss on $132 million worth of obsolete inventory. Acreage Holdings also has taken some time to pivot in its strategy. Early in the company's history, the goal was to be the biggest cannabis company with the most states under its belt. That was all fine and good when the access to capital was easy. However, investors began to tighten the purse strings and the strategy was no longer working. Making a profit became the new rallying cry. Underperforming assets have been sold and the company has adopted what has proven to be a winning strategy in cannabis -- zero in on specific markets where there are a lot of customers and the competition is manageable. New Green Deal Once Klein had Canopy on the right path, he could turn his focus to Acreage. Rather than back out of the deal, Canopy offered a new solution to what is now a radically different cannabis business environment. CEO Kevin Murphy left his position, but remains on the board and is still a major shareholder in the company. Instead of paying the shareholders $300 million, they would now get $37.5 million (approximately $0.30 per Existing Share on an as-converted basis). The money went directly to them and not to Acreage itself. Canopy would now only buy 70% of the company at a fixed price, but the remaining 30% would be allowed to move with the market. The idea behind the floating shares was that the Canopy shareholders should be able to participate in any upside in the stock, should that happen. Canopy can decide to buy these shares if the triggering event happens or they decide to waive that condition. The original symbol for Acreage on the OTC Markets Group was ACGRF. There are now two new symbols (ACRHF) , which are the fixed shares and (ACRDF) , which are the floating shares. ACRGF: Old symbol. Delisted. No longer trading. ACRHF: Fixed shares. 70% of Acreage that Canopy is obligated to buy at 0.30xx. ACRDF: Floating shares. 30% of Acreage that Canopy has the option to buy at 30-day VWAP (volume-weighted average price) or $6.42, which is higher. For now, the new shares are listed in the pink sheets at the OTC as new paperwork is prepared and approved. They are expected to move back into the higher OTC market groups. Further complicating the two share classes is that it seems retail investors prefer the fixed shares. They are assured that Canopy will buy these shares. The floaters are only an option to buy. Retail buyers fear Canopy could change its mind and not buy the other 30%. However, analysts have been covering the floating shares for their basis of valuation. So, when an investor reads an analyst report, it is based on the floaters not the fixed shares. It also looks like the relationship is back on track. The two companies have said they are going to roll out a new beverage line in the summer of 2021. It will combine the product expertise from Canopy with the reach of Acreage in the U.S. As so many deals in cannabis have ended in acrimony, it might be a lesson for much smaller cannabis companies on how to salvage a deal where both parties still benefit. It is certainly creative thinking for the financial world. ","isFirstPage":true,"url":"/investing/cannabis/here-s-how-to-make-sense-of-the-canopy-growth-acreage-deal-15447932","tier":"code":1,"name":"silver","subcategoryId":1290269,"photographer":"Canopy Growth","id":15447932,"relatedStories":,"headline":"Here's How to Make Sense of the Canopy Growth, Acreage Deal","contentType":"Text","headlineTwitter":"Here's How to Make Sense of the Canopy Growth, Acreage Deal","smallThumbUrl":"//","siteCode":"RMY","isVideo":false,"authorId":2814565,"largeThumbUrl":"//","headlineFacebook":"Here's How to Make Sense of the Canopy Growth, Acreage Deal","url":"/investing/cannabis/here-s-how-to-make-sense-of-the-canopy-growth-acreage-deal-15447932","tags":"[\"path\":\"markets/mergers-and-acquisitions\",\"name\":\"Mergers and Acquisitions\",\"id\":90,\"searchable\":true,\"categoryId\":2799018,\"path\":\"investing\",\"name\":\"Investing\",\"id\":144,\"searchable\":true,\"categoryId\":2798933,\"path\":\"markets\",\"name\":\"Markets\",\"id\":148,\"searchable\":true,\"categoryId\":2798938,\"path\":\"canada\",\"name\":\"Canada\",\"id\":259,\"searchable\":true,\"categoryId\":0,\"path\":\"investing/cannabis\",\"name\":\"Cannabis\",\"id\":2649043,\"searchable\":true,\"categoryId\":2798954]","publishDateAsString":"Oct 2, 2020 3:08 PM EDT","subcategorySlug":"usequity","channels":"[\"name\":\"Investing\",\"id\":2798933,\"name\":\"Cannabis\",\"id\":2798954]","isBrandedView":false,"authorName":"Debra Borchardt","metaTitle":"Here's How to Make Sense of the Canopy Growth, Acreage Deal","primaryTag":"Cannabis","isPremium":true,"authors":"[\"name\":\"Debra Borchardt\",\"id\":2814565]"}; Keystone.articleModelData = article: articleModel ; })(); About Privacy Terms of Use 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281 041b061a72


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