Dean Chaykowski, a contributor to Seeking Alpha, has written an extensive review of Canopy Growth (TSX Venture: CGC) that serves as a great introduction to the theme of investing in the legal medical cannabis industry in Canada and highlights the prospects for the early leader. Canopy Growth consists of the Tweed and Bedrocan Cannabis brands.
The author provides his own summary:
- Legalization of MJ is on the way in Canada.
- Canopy Growth Corp (TWMJF) is the number one Canadian grower of MJ.
- Revenues and profits will skyrocket when legalization occurs.
- Canopy controls up to 25 % of the Canadian MMJ market through its two brands.
The review begins with a discussion of the more favorable political and regulatory environment in Canada relative to the United States. The author points to Tweed’s ability to get free publicity as a factor for its success in attracting both customers as well as a premium valuation in the stock market.
Tweed and Bedrocan have been widely publicized by mainstream media and are the brands many Canadians recognize as the face of MMJ. The amount of face time that CGC receives from media sources per day is staggering, leading to tremendous brand name recognition and remarkably this promotion by in large is free advertisement.
The author considers how distribution may change in a more favorable manner, moving away from the current mode of mail-order exclusively. He then discusses how customer service is a key way the company differentiates itself.
Canopy CEO Bruce Linton understands that keeping the customers gained early in the MMJ market and keeping them satisfied is the best promotion. This investment in customer satisfaction converts dollars spent satisfying customers into dollars earned by retaining existing clients and benefiting from their word of mouth contribution to expanding your brand acceptance amongst clients and doctors.
While being a leader in Canada is certainly the near-term priority, the company is likely to expand globally, a key factor in the decision to acquire Bedrocan Cannabis last year. The author discusses other acquisitions and collaborations before sharing his views on the financial outlook and a review of its facilities. Finally, he concludes with some very bullish share price projections.
Read Dean Chaykowski’s “Canopy Growth Corp. Leads The Way Towards The Legalized MJ Market In Canada”: http://seekingalpha.com/article/3790336-canopy-growth-corp-leads-the-way-towards-the-legalized-mj-market-in-canada
