Canopy Growth Corp (NYSE: CGC) is having great start to the trading session this morning, and for good reason. The company announced that it has entered into a multi-year medical cannabis supply agreement. Of course, the news excited investors, sending the stock screaming for the top. Today, we’ll talk about:
- The agreement;
- what we’re seeing from CGC as a result; and
- what we’ll be watching for ahead.
CGC Enters Multi-Year Supply Agreement
As mentioned above, Canopy Growth is having an incredibly strong start to the trading session this morning after the company announced that it has entered into a multi-year supply agreement. In a press release issued early this morning, the company said that it has entered into an agreement with Centric Health Corporation to become the preferred education partner and supplier of choice of medical cannabis through its Spectrum Cannabis brnd to Centric Health and the seniors that it serves in both long-term care nd retirement residences, as well as those living in the community.
In the release, CGC announced that the two compnies will work together to educate Centric Health’s clinical pharmacists, as well as other healthcare partners, residents and seniors and their families with regard to the benifits and safe use of medical cannabis. In a statement, Mark Zekulin, President and Co-CEO at CGC, had the following to offer:
We believe that our partnership with Centric Health will help reduce many of the existing gaps in the continuing care space by having a trusted partner at our side who can provide education, assist in policy development and, most importantly, provide clinical pharmacist oversight of medical cannabis through medication management… The continuing care space is comprised of a patient population that can greatly benefit from the therapeutic effects of medical cannabis.
It was also announced that the two companies have entered into a separate business development agreement. Under this agreement, Canopy Growth has advanced funds to Centric Health to help with improved education assistance programs. As part of this agreement, Centric Health has issued 850,000 warrants to Canopy Growth at an exercise price of $0.25 per share for a life of 48 months with the vesting date set at September 4, 2020.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of Canopy Growth, the news proved to be overwhelmingly positive. After all, the new agreement will likely become a strong revenue producer. So, it comes as no surprise that excited investors are sending the stock on a run for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:13), CGC is trading at $55.35 per share after a gain of $2.95 per share or 5.63% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CGC. In particular, we’re interested in following the story surrounding the company’s newly minted medical cannabis relationship as well as their activities to carve a slice of the recreation cannabis market for itself. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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