Canopy Growth Corp (NYSE: CGC) has seen some interesting movement in the market over the past couple of months. However, after falling off of highs, many believe that the best is behind the stock. I’m here to tell you that this is not the case. The truth of the matter is that with several competitive advantages, current declines in the stock are presenting what I believe to be a compelling opportunity. Today, we’ll talk about:
- The competitive advantages;
- what we’re seeing from CGC stock today; and
- what we’ll be watching for ahead.
CGC Gains Are Not Behind Us
As mentioned above, with recent declines, many believe that the best days for Canopy Growth and its investors are behind us. However, in my view, that couldn’t be further from the case. The truth of the matter is that these declines likely represent an opportunity. Here’s why:
It all starts with the growing capacity at CGC. At the moment, the company has 2.4 million square feet of growing capacity in the industry. That’s a massive number and the strongest growing capacity out of the big three, including Tilray and Cronos.
Early on, when it became clear that Canada would legalize cannabis for recreational use, the company spent tons of money, investing its assets into its production capacity. In particular, much of this capacity sits in key regions like British Columbia. Once production reaches max capacity, the company will be generating between 450,000 and 500,000 kg of cannabis per run.
Another key here is foreign markets. While the focus recently has been on the Canadian recreational space, CGC has been focused on breaking into markets like Europe, the United States and more. As the laws surrounding cannabis continue to change, the company has positioned itself well to take advantage of these changes.
Finally, it’s worth mentioning that Constellation Brands sees value in Canopy Growth as well. The company is generally focused on alcoholic beverages. However, due to a massive, $3.8 billion investment, Constellation Brands now owns about 38% of CGC. This collaboration comes with increidble potential. After all, Constellation Brands has done an amazing job when it comes to sales of its beverages, and will likely do the same for CGC as their relationship continues to grow.
All in all, the company is well positioned to take advantage of not only the cannabis industry in Canada, but around the world. This combined with its relationship with Constellation Brands makes the stock hard to ignore.
What We’re Seeing From The Stock
While declines represent an opportunity in my view, that opportunity seems to be taking place today. Unfortunately, Canopy Growth is headed down. As is just about always the case, our partners at Trade Ideas were the first to alert us to the declines. At the moment (8:34), CGC is trading at $38.30 after a loss of $1.17 per share or 2.96% so 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 sales in Canada and around the world. We’re also interested in following the company’s production capacity as it has one of the largest production networks in the industry. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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