Canopy Growth Corp (OTCMKTS:TWMJF) has long been the most important momentum leader for the bigger players in the Canadian cannabis patch. And the stock has held up well during the recent correction in the space, still battling to hold its support along the 50-day simple moving average. However, as we have noted, stocks in this space are going to be engaged for some time in a battle over market share that may come down at some point to public perception and public relations. Think of it as preemptive risk mitigation. Institutional money has moved into this space. And you can bet that premium valuations will hold up in inverse proportion to regulatory and political risk in the cannabis sector.
That’s why one shouldn’t entirely overlook the company’s latest announcement. Specifically, the company just announced that it “wishes to recognize Canadian Students for Sensible Drug Policy which, with the support of an unrestricted grant from Canopy Growth, has compiled a comprehensive cannabis education toolkit aimed at youth. Sensible Cannabis Education: A Toolkit for Educating Youth focuses on realistic and evidence-based approaches to cannabis education for young Canadians.”
Canopy Growth Corp (OTCMKTS:TWMJF) is one of the bigger growers in the industry. The company produces and sells medical marijuana in Canada. It offers dry cannabis and oil products primarily under the Tweed and Bedrocan brands. It also sells its products through online.
According to company materials, “Tweed is the most recognized marijuana production brand in the world. It has built a large and loyal following by focusing on quality products and meaningful customer relationships. Tweed doesn’t just sell marijuana, it facilitates a conversation about a product we’ve all heard about but haven’t met intimately yet. It is approachable and friendly, yet reliable and trusted. As marijuana laws liberalize around the world, Tweed will expand its leading Canadian position around the globe.”
Also from their materials, “Bedrocan is the epitome of medical-grade cannabis. Bedrocan BV pioneered medical cannabis in Holland through decades of selection and refinement, leading to standardized, whole bud cannabis strains that patients can rely on. Bedrocan Canada supplies the same standardized strains to the Canadian market through exclusive licensing rights to the American continents, an arrangement it will also enjoy for all future genetic advancements. Due to its consistency over time, Bedrocan’s strains have been used in clinical research in seven European countries. That commitment to research didn’t stay on the east side of the Atlantic – Bedrocan Canada recently launched one of the largest clinical cannabis studies in the world, the EQUAL Study, to evaluate quality of life before and after medical cannabis use.”
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As noted above, shares of Canopy have performed well in relative terms during what has thus far been a relatively rough year to date for larger players in the cannabis space. One reason why may be that this company has managed, over time, to carve out a reputation with regulators and the general public of being a socially responsible firm on the rise. At some point, everything comes down to politics.
“Our Corporate Social Responsibility strategy is based on listening to communities and stakeholders and supporting areas where awareness and education can make positive contributions to society,” said Mark Zekulin, President, Canopy Growth. “Working with partners like PAD and CSSDP, we can use our resources to make a difference for young people in Canada and around the world.”
“Young people have a right to access and be involved in the creation of evidence-based education on cannabis, which is key to the development of youth’s health literacy in a rapidly changing legal context,” said Jenna Valleriani, Strategic Advisor, Canadian Students for Sensible Drug Policy. “Protecting all young people means including supports for youth who don’t use cannabis, but also those who will use cannabis no matter what resource is provided to them. We believe this toolkit is an important first step towards that mandate and can inform Canada’s efforts in developing pragmatic cannabis education, assist adults in having conversations about cannabis, and ground some of the common concerns and misconceptions around youth and cannabis use.”
Currently trading at a market capitalization of $2.27B, TWMJF has a significant war chest ($238.4M) of cash on the books, which must be weighed relative to about $1.5M in total current liabilities. TWMJF is pulling in trailing 12-month revenues of $69.8M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 122.5%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $TWMJF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $TWMJF, either long or short, and we have not been compensated for this article.