The legalization of recreational cannabis in Canada has proven to be a “sell the news” type of event and we are monitoring how the cannabis sector trades from here.
This pullback has taken place while the overall stock market has been under pressure and this is an important trend to monitor. Today, we have highlighted three Canadian cannabis producers that are worth watching.
Canopy: A Global Cannabis Leader
Canopy Growth (WEED.TO) (CGC) represents the most advanced Canadian cannabis producer and we have been favorable on this opportunity since it started trading in 2014. The company has been nothing short of an execution story and we are favorable on the leverage to the Canadian recreational and medical cannabis market as well as the global medical cannabis market.
With cannabis operations on 5 continents and more than 10 countries, the Canadian cannabis producer is well positioned to capitalize on a burgeoning global market. In 2019, we expect to see significant revenue growth from international operations and this is an exciting part of the growth story.
Earlier this month, Canopy Growth’s subsidiary, BC Tweed Joint Venture and its majority-owned joint venture, Vert Cannabis were issued license amendments by Health Canada, collectively representing 1.1 million sq. ft. of new greenhouse growing space. Through its subsidiaries, Canopy established a 5.6 million sq. ft. platform, which is now over 75% licensed. This makes the Canadian cannabis producer the largest in the world and we are monitoring how the team continues to execute.
Canopy Growth is focused on grabbing market share in Canada’s recreational market and is well positioned to do so. The company has enough capacity to increase the quantity and diversity of products available to retail and wholesale customers in the recreational market and fortify the supply of cannabis products available to its medical customers.
Going forward, Canopy Growth has very attractive growth prospects and this is a company that investors need to be monitoring. The Canadian cannabis producer is well positioned to capitalize on the global cannabis market and we are keeping an eye on how Canopy executes on this.
