CANOPY GROWTH CORP COM NPV (OTCMKTS:TWMJF) was a billion dollar market cap on Valentine’s Day. TWMJF was trading a solid $10.00 per share and wearing the crown as the largest valuation in the cannabis pure play stocks. Since February, shares lost half their value, and the decline is not specific to Canopy. Every sector stock has declined. It shows even the pedigree leadership names in the sector are under pressure.
It is not unusual for new markets to swing from undervalued to over-valued in short volatile periods. This is exactly what is happening in nearly every stock in the cannabis basket, and most of the decline is due to these companies needing to use their shares as currency to pay for services and operations. You can see the decline from earlier this year starting at $10.00 establishing the clear channel lower.
CANOPY GROWTH CORP COM NPV (OTCMKTS:TWMJF) announced the successful launch of its Craft Grow program. The program opens up access to genetics, knowledge and retail infrastructure to strategic partners and TWMJF committed $20 million in seed capital funding to ACMPR applicants and existing Licensed Producers.
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Specifically, the newly formed company, will operate as a joint venture with TWMJF. It will provide growth capital and strategic support to selected partners in exchange for a contracted stream of future cannabis production opportunities. Through its joint venture with Canopy Growth, it is also ideally positioned to provide strategic and operational support services on an as-needed basis to help reduce risk and expedite the development of its streaming counterparties and assist with the licensing process to help bring more producers to market faster.
As the global market leader in the cannabis industry, TWMJF receives inbound inquiries from applicants and operators across the country and abroad seeking strategic partnerships, operational support, wholesale off-take, and financial support. Since the launch of Tweed’s Craft Grow platform earlier this month, the level of interest in these types of agreements has increased considerably and established a need for a related, but distinct vehicle to pursue these opportunities.
The establishment of Canopy Rivers as a separate entity creates a unique platform through which these opportunities can be pursued allowing counterparties to maintain control of their operations, formulate their own unique brands and strategies, and fortify their own positions as members of Canada’s globally leading eco-system of emerging cannabis companies. It facilitates a lower cost, less dilutive source of growth capital that also comes with an opportunity to establish distribution from TWMJF’s Tweed Main Street and Craft Grow programs and platform.
“As new companies pursue opportunities in the sector, accessing capital and successfully navigating the stringent regulatory environment continues to be critical gating items for many. Canopy Rivers helps to fill that void with a less costly and less dilutive way to foster the cannabis ecosystem of both boutique and commercial scale operators. Consumers benefit from a more diverse collection of producers and products; and companies get access to an alternative source of capital that comes with a lifeline to tap for support if they need it. Canopy Rivers gets to build and maintain a steady supply of cannabis at a predictable cost, and Canopy Growth gets access to an increased outlet for wholesale supply and differentiated products. This platform creates a mutually beneficial way to support industry growth,” says Bruce Linton, Chief Executive Officer of Canopy Growth.
While initially a wholly owned subsidiary of TWMJF, Canopy Rivers will announce its executive leadership team, strategic partners, and its initial capital and streaming transactions in the coming weeks. Here’s to Future Growth for Everyone. About Canopy Rivers Corporation Canopy Rivers is a newly-formed and wholly-owned subsidiary of Canopy Growth focused on free cash flow generation and the aggregation of wholesale supply.
Canopy Rivers will enter streaming agreements to purchase a portion of cannabis harvested from licensed producers in exchange for an upfront capital and additional ongoing payments upon delivery of the product. In return, Canopy Rivers will be supplied with high-quality cannabis at predictable costs. Partners of Canopy Rivers will benefit from Canopy Growth’s world-leading expertise within the cannabis market while still allowing the partners to maintain day-to-day control over operational and strategic initiatives.
CANOPY GROWTH CORP COM NPV (OTCMKTS:TWMJF) is staying on message with partnerships and revenue opportunities, but the elephant in the room is the new lows the company makes each new trading day. This needs a reversal to bring back the billion dollar valuation these shareholders enjoyed on Valentine’s Day. The company currently has a market cap of $977.84M and has the brand name appeal that could return it to former glory. For continuing coverage on shares of $TWMJF stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!