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Introduction
Marijuana is a psychoactive drug from the cannabis plant. It is also referred by many slang terms like "weed", "pot", "grass", "ganja", "Mary Jane" and other monikers. Beginning in the 19th Century or even earlier, countries around the world have banned the cultivation and/or the use of cannabis. However, in recent years, some countries and states have awakened to the benefits of legalizing its cultivation or its medical or recreational use. Canada and Uganda are two countries that have fully legalized cannabis.
Canopy Growth Corporation, The Company
In April 2014, Canopy Growth became the first weed company in North America to be publicly traded. Today, it is a billion-dollar international company with offices in the Americas, Europe, South Africa and Australia.
Bruce Linton is the founder, Chairman and Co-CEO of the corporation and co-founder of Tweed Marijuana Incorporated, while Mark Zekulin is Co-CEO and President of Canopy Growth Corporation. Here is an interview with Bruce allowing him to discuss recent developments and plans for the company in his own words.
Recent News Developments
Last year (2018) US President Donald Trump signed the Farm Bill into law. This is good news for agriculture, including the growing of hemp. Canopy Growth intends to take advantage of this new development by entering the US market. Brightfield Group thinks that by 2022 the U.S. hemp-based cannabidiol market could grow to $22 billion. Constellation Brands, a big-name alcoholic beverage company, has invested $4 billion in 2018 to increase its stake in Canopy to around 38%. Mr Linton says legal-weed products could disrupt $500 billion worth of businesses across multiple sectors. The company is shooting for 5.6 million square feet of production capacity across Canada.
Recently in December, the company acquired Storz & Bickel, well-known for its technologically advanced vaporizers, for about $145 million. It also entered into a multi-year extraction agreement with Valens GroWorks, a licensed, vertically integrated provider of cannabis products and services.
Canopy is cash-rich and has strong partners. The company is apparently committed to bringing high quality products in various forms suitable to different consumers, including children. It also prioritises long-term investment in high technology over short-term profitabillity.
Company Stock
Canopy Growth Corp's ticker symbol is WEED in the Toronto Stock Exchange (TSX) in Canada, and is listed as CGC in the New York Stock Exchange (NYSE) in the US.
Here is a daily chart of CGC's performance in NYSE.
Despite the heavy rout of the broad-market indices like the S&P and the Dow Jones Industrial Index in December 2018, the decline of CGC's stock price has been more gentle.
My volume- and price-based Crispy Accumulation / Distribution Line holds up well, even though last Friday's close of US$28.23 was almost a 100% retracement since the run up from US$24.21 beginning 20th July last year. This suggests that smart or well-heeled investors are still having faith in the stock and keeping it for the long haul, while it was the weak hands who were having cold feet.
My short-term Reverse Projected Iterated Moving Average indicates some resurgence of enthusiastic buyers, but the long-term and mid-term technical prognosis for the stock remain seemingly bleak. However, optimistic buyers may see this as a good opportunity to get a little skin in the game, while the more patient way want to wait for the prices to test the Chistmas Eve low of US$25.26 to do their bottom fishing.
Disclaimer: The above analyses are based on my best efforts in research, but this neither constitutes financial advice nor is an inducement to invest or trade in any stock. Investors and traders bear full responsibility for their decisions and should do their own due diligence.