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Medical Cannabis Producer Canopy Growth’s Plan To Enter The New Recreational Marijuana Market

They will produce more than 750,000 kilograms of cannabis each year at full capacity

As Canada prepares to become one of the few developed nations to legalize adult-use of marijuana, prices of pot stocks in the country have been sky-rocketing over the past year. Given the vast opportunity that the passing of the Cannabis Act will bring starting in October of this year, there seems to be a strong upside potential for these Canadian cannabis stocks. Canopy Growth, which is the world’s largest publicly traded pot stock by market capitalization, is likely to witness a significant surge in its top-line from this move. Clearly, that is the reason why an affiliate of Constellation Brands (NYSE: STZ), which already had 9.9% stake in the company, acquired an additional CAD 200 million in the company’s recent sale of convertible debentures.

In our previous analysis – Medical Marijuana Producer Canopy Growth – Undervalued Or Overvalued? – we had talked about why we believe that the company has a huge upside potential despite some investors believing it to be overvalued. In this note, we discuss the company’s strategy to cater to the upcoming recreational marijuana market. You can view our valuation for Canopy Growth on our interactive dashboard and create scenarios to suit your assumptions.

 

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