An influential, Wall Street firm’s newfound support of one of Canada’s biggest cannabis companies – as well as the overall industry – sent the stock soaring this week.
Big run-ups are nothing new to the biggest Canadian cannabis producers. We’ve seen these hot runs many times now at The National Institute for Cannabis Investors prior to our launch.
But the reasoning behind the Canopy Growth Corp. (NYSE: CGC) surge by 11.76% on Thursday after posting a 13% gain the day before is deeply encouraging news for cannabis investors.
Investment bank and asset management firm Piper Jaffray announced mid-week that it was launching coverage of Canopy and gave it a rating of “overweight.” That basically means the stock is trading at a price that is lower than its realistic, analysis-based value.
Piper Jaffray analyst Michael Lavery told CNBC this week that he believes the total market for cannabis in the long term is between $250 billion and $500 billion.
A big part of the optimistic endorsement comes from the continued mainstreaming of CBD.
We happen to agree with the research on the tremendous potential of CBD-based products in the over-the-counter wellness market. We talked about that yet again in yesterday’s edition of Cannabis Profits Daily, as a major footwear retailer will now be selling such products in 44 states.
This brought the stock to a two-month high heading into Friday trading.
You’ll get no argument on the bullish outlook from ever-confident Canopy CEO Bruce Linton. In fact, our Cannabis Investor’s Report members can watch an exclusive interview with Linton from last year’s MJBizCon in Toronto by clicking here.
Interestingly enough, the “Big Alcohol” company that paid so much ($3.8 billion) for a 38% stake in Canopy Growth got hammered this week. Constellation Brands (NYSE: STZ) remains a great company with a lot for investors to like.
A big part of its latest earnings weakness is simply because of the interest charges related to the Canopy deal, which shocked the industry – and markets overall – five months ago just as the aforementioned MJBizCon was getting ready to start its opening session.
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Executive Director, National Institute for Cannabis Investors