Canopy Rivers is an undervalued stock, PI Financial says

The deals are coming fast and furious for cannabis sector investment company Canopy Rivers (Canopy Rivers Stock Quote, Chart TSXV:RIV), which …

The deals are coming fast and furious for cannabis sector investment company Canopy Rivers (Canopy Rivers Stock Quote, Chart TSXV:RIV), which on Tuesday announced a $1.5-million investment in 10663522 Canada Inc, or “Herbert,” a brand platform which aims to create lifestyle-based THC-infused products for distribution in Canada.

PI Financial analyst Devin Schilling is taking the news as a positive for RIV, saying that it will give Canopy Rivers early exposure to Canada’s forthcoming adult-use cannabis beverage and edible product segment.

Just days after announcing a $9-million debt financing investment in Greenhouse Juice Company, a beverage maker looking to expand nationally with CBD-infused wellness products, the new announcement sees Canopy Rivers — the investment arm of industry leader Canopy Growth Corp — putting money in Herbert, which reportedly has ties to Greenhouse Juice.

“In the US, cannabis-infused beverages have emerged as a high-growth segment within the ingestibles category, and include a variety of products in both THC- and CBD-dominant formats,” says Narbe Alexandrian, President of Canopy Rivers, in a press release. “In Canada, we expect similar growth beyond dried flower and oils into food and beverage. Canopy Rivers believes that Herbert, equipped with existing R&D, marketing and manufacturing expertise, has the ability to enter this market quickly and achieve success in creating widely appealing THC-infused beverages and edibles under this new standalone brand.”

Schilling says that in mature markets in the US, edibles make up between ten and 15 per cent of total sales, and he predicts a similar market in Canada, with the implementation date likely to come before October of this year, says Schilling.

“Hebert intends to leverage Greenhouse’s existing purpose-built, food-grade and GMP-compliant production and processing facility through an arrangement with Greenhouse,” says Schilling in a client update on Tuesday. “We believe this will be a cost-effective way of getting product to market, once regulations permit.”

Schilling has maintained his “Buy” recommendation with a “Speculative” risk rating for RIV and his $9.00 target price, which represents a 111.8 per cent return at the time of publication.

“We believe Canopy Rivers represents best-in-class exposure to the emerging global cannabis sector,” says Schilling.

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Why Canopy Growth Corp (NYSE:CGC) Remains A Buy

Shares of Canopy Growth Corp (NYSE:CGC) have started surging after a steep pull back from record highs, registered in October. A 50% plus pull …
Posted onJanuary 16, 2019

Shares of Canopy Growth Corp (NYSE:CGC) have started surging after a steep pull back from record highs, registered in October. A 50% plus pull back had initially raised concerns. However, not anymore. The stock is powering high as investors react to recent developments that have once again affirmed why Canopy Growth is an exciting pick in the sector.

Canopy Growth Price Analysis

The New York State is fresh from granting the company a hemp license that paves the way for the company to build its first cannabis production facility in the U.S. The passing of the 2018 Farm Bill has also made it easy for Canadian companies to enter the U.S the market after struggling with cross border restrictions in the past.

The stock is already up by more than 50% for the year, making it one of the top performers in the sector. With the rally, the stock has essentially turned bullish after coming under pressure on the broader sector turning bearish late last year.

The rally opens the door for the stock to make a run for the $47 a share level, seen as the next substantial resistance level. A breach of the resistance level should open the door for the stock to make a run for its record highs of $59.25.

CGC Daily Chart

On the downside, Canopy Growth faces immediate support at the $33 a share level. Any sell-off followed by a close below the critical support level could give short sellers a reason to continue pushing the stock lower, probably to one-year lows of $20 a share.

About Canopy Growth

Canopy Growth is a Canadian cannabis company engaged in the cultivation processing and sale of medical cannabis in North America. Its product pipeline includes dried flowers, oils as well as concentrates and soft gel capsules.

U.S Opportunity

Canopy Growth is surging in the market on investors taking note of the fact that the company remains well positioned to benefit from growth in the multi-billion industry. Unlike other players, the company boasts of a global footprint with operations in 12 countries. The company already has 4.3 million square feet of licensed cannabis location and is currently working on an additional 1.3 million.

The company’s footprint is set to receive a boost on the New York State granting the firm a hemp license. Plans are underway to spend as much as $150 million in the construction of a production facility in the state. The production facility should go a long way in strengthening the company’s operations in the U.S.

“Canopy has been preparing for and investing in this opportunity for several years now, through strategic acquisitions, infrastructure expansion, and extensive internal research and development. With the door now open, we are moving fast to bring our considerable resources to establish the same market leadership position internationally that we have earned in the Canadian cannabis market,” said Bruce Linton, Chairman, and Co-CEO, Canopy Growth.

The passing and implementation of the U.S Farm Bill clears the way for the likes of Canopy Growth to strengthen their operations in the U.S. For starters, the company will now be able to grow cannabis in the country to take advantage of the huge cannabidiol products market.

Constellation $4 Billion Investment

Renewed investor interest in Canopy Growth also stems from a $4 billion investment in the company by Constellation Brands. The investment accords the company the much-needed financial firepower to ramp up its cannabis infrastructure. The company will also be able to accelerate its marketing efforts as well as enhance its research and development efforts.

A partnership with Constellation Brands also accords Canopy Growth access to a new distribution network across the U.S, Mexico, New Zealand, Canada and Italy. That said the company should be able to reach a wider target market in pursuit of new revenue streams.

Bottom Line

For early movers looking to gain exposure in the multibillion-cannabis industry, Canopy Growth is an exciting pick. The stock deserves a spot in any investment portfolio given the company’s large cash position, the key to pursuing opportunities in the sector.

A strong cash position should allow the company to ramp up its operations in pursuit of new revenue streams as well as shareholders value. The setting up of a production facility in New York is another development that affirms the company’s long-term prospects.

After a steep pull back from record highs, Canopy Growth has emerged as a strong buy as it continues to bounce back in continuation of the long-term uptrend.

We will be updating our subscribers as soon as we know more. For the latest updates on CGC, sign up below!

Disclosure: We have no position in CGC and have not been compensated for this article.

GMP Analyst Lifts Canopy Growth Corp. (CGC) Price Target

CGC – Analyst Martin Landry maintains a Buy rating on Toronto-listed Canopy Growth stock with a price target lifted from CA $50 ($37.74) to CA $70 …

Canadian cannabis company Canopy Growth Corp (NYSE: CGC) confirmed Monday that it received a license to produce and process hemp in New York, prompting GMP to turn incrementally bullish on the stock.

The Analyst

Analyst Martin Landry maintains a Buy rating on Toronto-listed Canopy Growth stock with a price target lifted from CA $50 ($37.74) to CA $70 ($52.83).

The Thesis

Canopy said it will invest $100 to $150 million in establishing a large-scale hemp extraction and product manufacturing in New York, Landry said in a Tuesday.

The company harvested 4,500 acres of hemp last fall — good enough for 7 tons of CBD extract, the analyst said.

Canopy can leverage its first-mover advantage in the U.S. by starting with New York and eventually expanding nationwide, Landry said. CBD represents a $50-billion market across multiple products, so even a minor share equates to “material” potential for Canopy, he said.

Canopy is likely to unveil new brands and product assortments in the first half of 2019, and its partner Constellation Brands, Inc. (NYSE: STZ) could play a role, the analyst said.

GMP said its upwardly revised price target for Canopy is driven by the “significant” green-light the company was given to operate in New York, as the stock now offers investors exposure to the U.S. market.

Price Action

Canopy Growth shares were trading higher by 5.53 percent at $44.82 at the time of publication Tuesday.

Canopy Growth Corp. shares were trading at $43.64 per share on Tuesday afternoon, up $1.15 (+2.71%). Year-to-date, CGC has gained 62.41%, versus a 3.97% rise in the benchmark S&P 500 index during the same period.

CGC currently has a POWR Rating of C (Neutral), and is ranked #28 of 201 stocks in the Medical – Pharmaceuticals category.

This article is brought to you courtesy of Yahoo Finance.

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Canopy Growth (WEED) Trading Up 4.6%

Shares of Canopy Growth Corp (TSE:WEED) were up 4.6% during trading on Thursday . The stock traded as high as C$47.19 and last traded at …

Canopy Growth logoShares of Canopy Growth Corp (TSE:WEED) were up 4.6% during trading on Thursday . The stock traded as high as C$47.19 and last traded at C$46.54. Approximately 1,238,032 shares were traded during trading, a decline of 45% from the average daily volume of 2,269,786 shares. The stock had previously closed at C$44.50.

Separately, Benchmark restated a “buy” rating and set a C$100.00 price objective on shares of Canopy Growth in a research report on Tuesday, September 25th.

The company has a debt-to-equity ratio of 49.44, a current ratio of 0.65 and a quick ratio of 0.44.

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Canopy Growth Company Profile (TSE:WEED)

Canopy Growth Corporation, together with its subsidiaries, engages in growing, possession, and sale of medical cannabis in Canada. Its products include dried flowers, oils and concentrates, softgel capsules, and hemps. The company offers its products under the Tweed, Black Label, Spectrum Cannabis, DNA Genetics, Leafs By Snoop, Bedrocan Canada, CraftGrow, and Foria brand names.

Further Reading: How Do You Calculate Return on Investment (ROI)?

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Why Aurora Cannabis and Canopy Growth Caught Fire Today

Canopy Growth (NYSE:CGC), a top Canadian pot company, is up big again today. Shares of the pot titan bolted higher yesterday on a particularly rosy …

What happened

Canopy Growth(NYSE:CGC), a top Canadian pot company, is up big again today. Shares of the pot titan bolted higher yesterday on a particularly rosy upgrade from analysts at Piper Jaffray. And the company’s stock is getting yet another boost today from an unrelated bit of news: an upbeat earnings outlook provided by its partner Constellation Brands(NYSE:STZ).

During Constellation’s quarterly conference call, held yesterday morning, the beverage giant implied that Canopy is on track to far surpass Wall Street’s revenue expectations over the next 18 months. Specifically, Constellation’s president and COO Bill Newlands noted during the call that he believes Canopy will haul in approximately 1 billion Canadian dollars in revenue over the course of the next year and a half.

This optimistic outlook appears to have helped Constellation Brands’ shares rise by as much as 7% today, and it also seems to have caused the shares of fellow Canadian pot producer Aurora Cannabis (TSX:ACB)(NYSE:ACB) to spike by exactly 10% in early-morning trading.

A hand holding a marijuana leaf against the backdrop of a city in the distance.

Image Source: Getty Images.

So what

Why is Constellation’s glowing optimism in its Canopy Growth investment such a big deal? Given that the Canadian pot market remains in the early stages of commercial development, industry insiders were expecting sales to ramp up fairly slowly at first. The black market, after all, is still a major source of competition for legal marijuana operations in Canada.

Complicating matters further, regulators limited the initial launch of recreational pot products to dried flowers, seeds, and oils, giving illicit operations a clear-cut competitive advantage through their ability to offer a wider variety of products.

However, Constellation is predicting that — despite these headwinds in the nascent legal pot market — Canopy will exceed Wall Street’s consensus revenue estimate for the next 18 months by something along the lines of 56%. That’s a rather bold prediction. But Constellation probably wouldn’t roll out such a staggering revenue estimate if there wasn’t solid data to back it up.

Now what

Is Constellation’s outlook justified? Unfortunately, the answer to this all-important question won’t become readily apparent until top companies like Aurora and Canopy Growth begin to release their quarterly earnings in the coming weeks. From what we know so far, though, the demand for legal marijuana has far outstripped supply in Canada since the drug became legal for adult-use recreational purposes last October. Whether this strong demand will translate into better-than-expected earnings remains to be seen.

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