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Canopy Growth Corp (TSE:WEED)(OTCMKTS:TWMJF) Proves The Fools Wrong Yet Again

Canopy Growth Corp (TSE:WEED)(OTCMKTS:TWMJF) Proves The Fools Wrong Yet Again
Written by
Alex Carlson
Published on
March 29, 2017
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InsidrFinancial

Canopy Growth Corp (TSE:WEED)(OTCMKTS:TWMJF) has once again shown that there's no stopping its bull run, although the folks at The Motley Fool have certainly tried. They were saying that a crash was imminent in Canopy Growth Corp on March 9th. All we can say here at Insider Financial is that no serious investor takes them seriously and just ignores their advice. Canopy have proven time and time again that each pullback is a discount entry opportunity for cannabis investors ahead of a move to new highs.What's most exciting about Canopy is that there is no shortage of catalysts to keep the stock moving higher. The biggest catalyst and one which changes the dynamics of the entire cannabis landscape is federal recreational marijuana legalization in Canada. Back in December, we saw the Canadian Federal Task Force issues its recommendations on how to legalize recreational marijuana use. The proposals included a minimum purchase age of 18, federal oversight on production, provincial governments charged with retail distribution and maintaining criminal offenses for illicit production and trafficking. The Task Force was lead by Canada’s former attorney general and offered more than 80 recommendations on how Canada could become the largest developed-world country to legalize marijuana.We've been saying here at Insider Financial that we expected the legislation to happen some time this spring. It turns out we were right on the money in terms of when the legislation is being introduced. According to CBC News:

CBC News has learned that the legislation will be announced during the week of April 10 and will broadly follow the recommendation of a federally appointed task force that was chaired by former liberal Justice Minister Anne McLellan.

The legislation is set to go into effect on July 1st and no Canadian company is better prepared and positioned than Canopy. Tweed just announced the licensing of additional facilities at its flagship Smiths Falls campus, including new grow rooms that will increase flowering space by 50 percent. Tweed has also received licensing approval for a number of additional rooms targeted at value-added production and operational expansion, including several new fulfillment rooms that will triple Tweed's order fulfillment capacity. When you take into account the recent purchase of the 470,000 sq. ft. Hershey Drive campus, there's plenty of run room to accommodate the increased demand Tweed will receive from the new legislation.Also under the new legislation, Canadians who want to grow their own marijuana can. However, they will be limited to four plants per household. Tweed plans on capturing this market with its HomeGrow Collection. The HomeGrow Collection consists of 10 cannabis varieties ranging from low & high THC to CBD options. Tweed has used the HomeGrow collection to target medical cannabis patients growing their own. Canopy President Mark Zekulin said:

"Our goal is to offer a wide selection of cannabis products in a variety of formats, from dried bud and blends, to oils. We know there is demand for high-quality cannabis seeds and we have long supported the patient's individual right to grow their own medicine so this is a special day for our company."

Canopy remains well-capitalized and just closed a C$24.25 million private placement financing with one investor. The company issued 2,500,000 Shares at a net price of C$9.70 per share. Chairman & CEO Bruce Linton said:

"With the recent addition of Canopy Growth to the S&P/TSX Composite Index, imminent Canadian adult access markets and the awakening of legal cannabis markets in Germany, Australia, Brazil, Israel and elsewhere around the globe, we are entering a very opportunistic period for our business. This equity financing gives us more resources so we can accelerate into this expected window of opportunity."

Currently trading with a market cap of C$1.74 billion, Canopy Growth Corp just became the first cannabis company to be included in the S&P/TSX Composite Index. This inclusion allows index funds to hold a cannabis stock for the first time ever. The overall market trends in Canada are extremely bullish for Canadian cannabis companies. With Canopy as the market leader, it's going to be the first mover and biggest beneficiary of this bull market. That's why we can't understand what the folks over at The Motley Fool are thinking, but as they say, when a Fool tries to give advice, it's best to laugh and just move on. In the case of Canopy Growth Corp shares, it's climb higher.We will be updating our subscribers as soon as we know more. For the latest updates on WEED/TWMJF, sign up below!Disclosure: We have no position in WEED/TWMJF and have not been compensated for this article.

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