The world’s largest cannabis stock has done it again!
Canopy Growth Corp (OTCMKTS:TWMJF), whose share price has been going up and up since June, has taken the bullish outlook to a new level with their new high in share price.
During our last review of the company which can be read here, amidst other announcements, their share price stood at about $10.
Currently the share price stands at $13.27, another 32.7% increase, and is expected to go further up in the coming future. Readers can view this amazing price trend below:
Questions as to what has been driving such a high valuation from the market linger in many people’s minds with investors within the company having their best days yet as far as wealth creation goes.
We seek to answer these questions as well dive into the company, new developments that have affected its performance as well as its share price and any value creation activities that they may be looking to engage in moving forward.
First, however, let us get acquainted with the operating environment of TWMJF.
The Creation of TWMJF
Incorporated in 2009, TWMJF is a licensed cannabis producer based in Canada. They have so far built a brand as the world’s largest cannabis company with a market capitalization of $1.3 billion.
TWMJF operates through subsidiaries that produce a range of medical marijuana products for distribution in Canada and abroad. They pride themselves in being a diversified cannabis company with a wide range of products that include, but not limited to, oils, soft-gel and dried substance.
With such a high valuation, the expected legalization of recreational cannabis in the Canadian markets and a growing operating environment as shown by the increased acceptance of cannabis and its related products worldwide, TWMJF is poised for great highs looking into the future.
Recent Studies and Developments
Consumer survey works recently published results suggesting that about 80% of consumers reduce their alcohol consumption when cannabis is in the mix. This survey has seen alcohol companies finally come to view cannabis as a competitor rather than a far-fetched threat as used to be courtesy of the growth that has been seen in recent years in the cannabis industry.
Constellation Brands, Inc. (NYSE:STZ), however, doesn’t see it that way.
Constellation Brands Inc, a Fortune 500 company and the owner of Corona and one of the largest suppliers of alcoholic drinks in the U.S. and Canada, has chosen to embrace its competition and venture into the new and growing space.
This is exemplified by the C$190 million stake they have taken in Canopy Growth Inc to own about 9.9% of the company.
This is the best news yet for TWMJF who have now received a significant boost both in terms of brand equity and financing given the financial backing a company like Constellation Brands Inc brings to the table. The two companies are seeking to capitalize on each other’s strengths in consumer analytics, marketing and branding, as well as collaboration on the development and marketing cannabis infused beverages which they expect will hit the markets quite soon.
There is, however, more to TWMJF.
With the kind and size of a gamble that Constellation Brands Inc has taken, it is only fair to say that their expectations of the cannabis industry are quite high. Moreover, their bid to consolidate such competing industries to maximize their growth as well as capitalize on both markets is a show of a strong and broad view of the horizon as well as sheer will to remain relevant with the changing times.
Over time, we expect that TWMJF will continue to outperform its competitors and with their partnership and huge financial backing, continue to grow globally as they currently are.
Their financial position can only be described as impeccable.
Their revenue position increased by 8.27% in their second quarter to close the period at over C$15 million with their gross income also rising to over C$3.9 million, a 119% increase from their loss position in the previous quarter.
However, the company was operating at a loss during the period with a loss of C$4.3 million in 2Q2017. Despite it being lower than C$22.3 million in 1Q2017, such a significant loss position is still bound to raise investors’ eyebrows as to the future position of the company.
Despite this their current and quick ratios over 2Q2017 stood at 13.16 and 8.43 respectively, significantly higher than the general red-flag levels set by analysts while their working capital base closed the quarter at C$192,275, a 25% increase from C$153,859 in 1Q2017.
Finally, their shareholder equity capital grew by over C$32 million to end the period at over C$647 million. Their financial base was therefore solidified more during this period and is bound to keep growing long into the future.
The above talks to a vibrant company with a strong financial management team. Coupled with their operating environment, we see TWMJF continuing to grow fast and be the dominant force in the industry. Investors in this company won’t wait too long to get their money growing for them.
TWMJF represents one of the success stories in the market. Their strong financial base and even stronger vision is bound to elevate them to greater heights. This is a chance any investor doesn’t want to miss out on.
We will be updating our subscribers as soon as we know more. For the latest updates on TWMJF, sign up below!
Disclosure: We have no position in TWMJF and have not been compensated for this article.