Canopy Growth Corp On The Verge Of A Breakout

Canopy Growth Corp climbed the entire month of October. Now that November is upon us, Canopy is on the verge of a breakout to new highs. This comes as investors across the entire cannabis space get excited ahead of the November ballots in the U.S. The highlight of these initiatives is recreational use in California and Nevada. Many are expecting passage next week and we believe this will further light up the sector.Up in the Great White North, there's even more excitement as next year will likely see marijuana legalization across Canada. Prime Minister Justin Trudeau was elected after including legalization of recreational marijuana. On April 20th, 2016, the Canadian Health Minister Jane Philpott announced that Canada would introduce legislation to decriminalize and regulate cannabis in spring of 2017. The recreational market in Canada is estimated to be worth $7 to $10 billion. For investors looking to play the Canadian cannabis, Canopy Growth Corp is a must-own.For those not familiar with Canopy, the company aims to be “a world-leading diversified cannabis company, offering diverse brands and curated cannabis strain varieties in dried and oil extract forms. Through its wholly-owned subsidiaries, Tweed, Tweed Farms, and Bedrocan Canada, Canopy Growth operates three state-of-the-art production facilities with over half a million square feet of indoor and greenhouse production capacity. Canopy Growth has established partnerships with leading sector names in Canada and abroad.” Canopy trades in Canada under the symbol CGC, in the US under TWMJF, and 11L1 in Germany.The latest news from Canopy Growth is that the company signed a deal with the Goldman Group to expand Canopy Growth's cannabis production capacity and geographic footprint. The Goldman Group through its affiliates owns approximately 3.8% of the outstanding shares of Canopy Growth and is already the landlord of the Company's Bedrocan Canada Inc. properties. Its founder, Murray Goldman, also sits on the board of Canopy.The agreed upon growth strategy will see the Goldman Group acquire new properties across Canada for the design and/or build of new Canopy Growth production facilities. Subject to the Company's approval, these facilities will be constructed to Canopy Growth's proprietary specifications as they are defined by established production methods for each of its subsidiaries and leased back to the Company. Through this approach, the Goldman Group will continue to expand the substantial real estate portfolio it has built in its 50-year global operating history, while benefiting from a reliable, multi-site, long-term tenant operating in a rapidly expanding industry. Canopy said:

Cannabis market projections developed by leading Canadian financial institutions and today's report by the office of Canada's Parliamentary Budget Officer consistently project a multi-billion dollar industry in the coming years. With this new expansion strategy, Canopy Growth builds on its already leading position as a vertically integrated producer capable of earning a large market share through unparalleled production scale.

On November 1, Canopy Growth acquired Vert Médical, a Quebec-based ACMPR applicant. Canopy Growth has also acquired the lease and the right to acquire 90 acres of land and a 7,000 square foot indoor growing and office facility located in Saint-Lucien, Quebec. The Canopy Growth team said that it will apply its documented and compliant standard operating procedures to pursue completion of the ACMPR license application.In conjunction with the Vert Medical acquisition, Canopy Growth acquired majority ownership of Drummondville, Quebec-based Groupe H.E.M.P.CA Inc. Groupe Hemp is licensed by Health Canada to cultivate hemp and extract oil from hemp seeds. The Company has developed a variety of brands, digital properties, and hemp products, ranging from skincare to pet care, with a global market expansion strategy starting right at home in Quebec. Canopy said that the acquisition strategically diversifies Canopy Growth's business in a distinct but complimentary market.What got Canopy really moving at the beginning of last month was the deal between Snoop Dogg and Tweed. Leafs by Snoop will soon be available in Canada exclusively to customers registered with Tweed. The Tweed Shop will soon be home to the first three Canadian Leafs by Snoop varieties – Sunset, Ocean View and Palm Tree CBD – a nod to the West Coast rapper’s California heritage. Starting with three whole-flower dried cannabis strains and expanding over time, Leafs by Snoop will be a full spectrum offering of diverse strains including a high CBD option and mid to high-range THC options. For a company looking to be the dominant player in the recreational market, there isn’t better name recognition than Snoop Dogg in the marijuana space.Currently trading with a market cap of C$740 million, we see Canopy's market cap surpassing the C$1 billion mark in the next few months. There are certainly plenty of catalysts ahead to keep the stock moving higher. We see Canopy Growth Corp as one of the best plays in not only Canada, but also in the entire cannabis space. With the favorable regulatory environment in Canada and its partnership with Snoop Dogg, Canopy seeks to be one of the Blue Chips of the cannabis industry. Already Canopy is the largest producer in Canada and with global ambitions, Canopy is one of the must-own stocks in the sector. We will be updating our subscribers with the latest on Canopy and other cannabis names. For complete coverage, sign up below!Disclosure: We have no position in Canopy Growth Corp and have not been compensated for this article.