Even though Bruce Linton is gone, Canopy Growth is still a company you want to own forever…

Last week, I promised that I would have a full report about Bruce Linton leaving Canopy Growth Corp. (NYSE: CGC). Now that we know his co-CEO, Mark Zekulin, is also scheduled to depart, I want to share some thoughts with you.

I admire Bruce, so I want to be clear about that.

However, this change in management will ultimately be good for investors. That’s because Canopy is still operating as a new company, and it needs to get to the next level.

For a startup, a shakeup in management is pretty common when the company goes public. What’s less common is when that “startup” has been operating for six years, with the largest market share in its primary market and a multi-billion dollar market cap.

And that’s what happened here.

The CGC stock price has traded down slightly since the news of Bruce leaving first broke, but I’m not worried.

In fact, I’m going to show you three investing strategies to make you the most money from Canopy…

What to Know About Canopy Moving Forward

Before I share the three ways to play Canopy, I wanted to take a moment to discuss a little bit more about this shakeup so you will know what’s important to focus on and what is just noise.

That’s because, even as a current leader in the cannabis market, there’s still a lot of work to be done.

Even though Canopy has been operating for six years, it has only been selling legal cannabis to recreational consumers for nine months. That essentially makes it a startup. Second, that market share is in Canada, which is a tiny fraction of the global cannabis market.

Finally, one of the reasons it has a multi-billion dollar market cap, is that Constellation Brands (NYSE: STZ) gave Canopy a war chest of $4 billion.

After a disappointing start to the Canadian recreational market – and I don’t care what Bruce or anyone else says, results so far have been disappointing – Constellation lost patience and decided to make a change.

Company founders are rarely the people to take a company to its next level. We look at examples like Bill Gates and Warren Buffett and think it’s normal, but it’s much more common for company founders to leave voluntarily or get fired even before the company they founded goes public.

And it’s not just in business.

In 2014, the Golden State Warriors fired head coach Mark Jackson. The owners acknowledged that Jackson improved the team, but the owners also thought that someone new could take Golden State to the next level. They were right.

Source: Wikimedia Commons

Jackson’s successor, first-year coach Steve Kerr, won the 2015 NBA Championship.

It was Golden State’s first championship in 40 years, and the team has won two more championships since then, creating a dynasty.

And that’s the situation we have here. The management team at Constellation – which is the best in the world in any industry – will be picking the team that will get Canopy to the next level of success. I’m comfortable with that, and I’m perplexed by those who are not.

I still think Canopy will be the dominant player in the global cannabis market, and that’s why I refer to it as the “Microsoft of Cannabis.” At the very least, there’s a possibility that the new CEO will make better use of Canopy’s cash hoard than Bruce.

Constellation’s management wasn’t pleased to see a company with nearly $4 billion in cash issue so many shares for acquisitions and for employee compensation.

Now that you know the whole situation with Canopy, let’s take a look at the three ways to profit from it.

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How to Play Canopy

Option 1: Invest in Constellation Brands

Those who want to take on the least amount of risk can simply buy Constellation stock. I’ve recommended that stock to you before, and I believe that with a top-notch management team, a rising dividend, and a large stake in Canopy, Constellation will be a stock to retire on.

You get big exposure to cannabis through Constellation, and you also get industry-leading brands in beer, wine, and spirits.

Option 2: Buy More Shares of Canopy Growth

You can always buy more shares of Canopy.

With the downturn in the overall cannabis market over the past couple of months, you can buy the stock even cheaper now.

Owning Canopy stock at a big discount to where Constellation has options to increase its stake is a good place to be.

Option 3: Buy Acreage Stock

Finally, for those investors willing to take on a little more risk, you can buy shares of Acreage Holdings (CSE: ACRG, OTC: ACRGF). Canopy is buying Acreage, of course, but the market is valuing Acreage shares as if it has big doubts about when the transaction might close or even if it will close at all.

Canopy shares have declined since the Acreage deal was announced in April of this year, but Acreage shares have declined even more. That means that if you are confident that the Canopy/Acreage deal will close – and I am confident – then you can “own” Canopy shares at a big discount by buying Acreage shares for around $15.10 per share.

The Canopy shares you’d receive for Acreage would be valued at around $23.35 as of this writing, and that’s a 55% profit.

Again, this strategy is a little riskier, but it offers a potential quick double-digit gain.

Greg Miller

Executive Director, National Institute for Cannabis Investors

P.S. The CBD market has exploded virtually overnight. Thanks to news of its application for chronic pain, seizures, anxiety, and more – experts predict the market to grow more than 15 times faster than the overall cannabis industry. They’re even predicting CBD sales to jump 3,622% in the next three years alone. With this kind of growth, investors would be crazy not to consider this market. That’s why we’ve identified two CBD companies with massive profit potential… and you can find all the details here.


Comments

27 responses to “3 Ways to Make Money from Canopy Growth”

    • Yeah, I am just like Jimmy Welch. Just retired last year from the P.O. and knows nothing about investing; am trying to learn.
      How to do a trade. I have shared with Schwab, but do not know how to trade.

  1. Morning Greg how are you? Yes all of those strategies will work if your in a position to do any of them. I presently have two of the three in my portfolio. With all of that said I am still waiting to see the new tone the market has taken that you have spoken of or the beginning of this outstanding summer that lies ahead for us!!!! Whats up with Iconic Brands is this company bottoming out it has done nothing but go down ever since it was recommended right right along with the rest of our recommendations. Any insight on whats the problem with this company? At either rate have a great day Greg and much success to all of us in the future!!!!

    • You will never get a answer to your question, every stock that Greg has recommended the’re all down, down, down.

  2. How do you feel about options for Canopy or even STZ? I don’t see any recos for options from you all on some of these high flyers. Wouldn’t that be a good way to play some of your unreachables? Especial STZ looks tasty

  3. Greg, I enjoy reading your very knowledgeable commentary on the cannabis industry, and have incorporated your recommendations into my investing strategy. That being said, I “play the lottery” occasionally, but invest in stocks. Please consider an alternative phrasing. Play diminishes the credibility of your analysis.

    • I sold all of my Canopy and Acreage shares when they started dropping a month ago and made a good profit and i’m happy that I did because now the price of both stocks are less then I paid for them, If I had held on to them I would have lost a lot of money. Now I will watch them and get back in at a much lower price then I originally paid. My point don’t be afraid to sell, you can always buy back in. Take the profit when you can. Good luck!

  4. Thank you finally I get the news.It has been hard to log in ..So I gave up for a while. Today is ok.It did not askt me to log in I just received the report thank you so much.Tina.

  5. I agree that Canopy is still a good investment. In fact I invested in Canopy before I became a lifetime member, albeit that it was at a significant higher price than current price. I pick up a few shares when I can buy at a discount to bring my total cost down and increase my shares. They have had a good game plan and I believe that it is going to get better. By 2025 I expect that most of us will be wishing we had bought more, just like I have with Microsoft.

  6. Greg i want to thank you for all the good recommendations I have received from you and others.My portfolio has been up and down from month to month but in this game patience is the name of the game. Thank you so much. Daniel p.

  7. It’s very unfortunate that the next great opportunity requires upgrading your membership to get it. Hopefully they will change their priorities to helping members make money & not simply adding new members!

  8. I am quite impressed by your presentation and look forward to my future involvement with great anticipation.

  9. Hey Greg, I looked at Acreage Holdings, but it was a bit out of my price range. I did however get some of the preferred shares of Acreage for a fraction of the stock price and have already received dividends on it. Glad I did some research. Thanks for all you do and keep up the good work. Look forward to more insights.

  10. Investing in this industry requires nerves of steel. I have gone from a plus $100,000 to a minus $5,000 with Canopy.

  11. I have acquired shares of Acreage Holdings when it was about $25.00
    per share. I’m wondering where that would put me after the acquisition.
    I was also told by my broker that after the settlement between the two companies an ‘acquisition’ fee is deducted from share holders of the acquired company. So will that turn out as a discount purchase for the Acreage holders or not?

    edt
    Chicago, Illinois

  12. I’m one if the founding members but have never traded in my life. I don’t know how to do the first step. I have an account, a broker. But I need step by step guidance. Constellation and Canopy Growth I would like to start small with. I hope you can map it out for me.

  13. It seems to be able to do the trades I must subscribe to another subscription “Elite ” for $549. And then I will,be shown how to do the trades for Constellation and Canopy Growth?

    • Deborah, That’s not true. You can put funding into almost any stock trading company , like I used E-Trade. They will show you how to look up these stocks and how to buy others. They charge me, $6.95 for each tradeI make. Please be careful when signing up to become an Elite member. I apparently clicked on the wrong parts, and instead of becoming an Elite member, I was charged $3,450 to become something else. When I realized what had happened, I called to get help. Fortunately Brad one of the team members saw my mistake and immediately refunded the money, and helped with some other things I had screwed up on. Now I am a happy NICI investor once again. Call and ask for him, he will quide you through the maze., or at least find someone who will help you..

  14. Back when I was buying these stocks I just opened a tax free savings account and a direct investing account through my bank. I think trades generally took a day or two but you can also sell and buy based on stock price so you have almost an open order sheet . They have traders you can phone for more instantaneous trades. The best thing is that if you have a good financial advisor they can help you use a toss or maybe 401k in states and then you don’t have to pay taxes on a certain amount of profit if you roll it back into whatever retirement plan after selling the shares.

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