Canopy Stock Forecast 2019
The future of the marijuana industry is bright. While day-to-day the market may fluctuate, the overall trend is firmly pointing upward. And few marijuana stocks are better positioned to take advantage of the coming growth than Canopy Growth Corp (NYSE:CGC).
The Canopy stock forecast for 2019 is exciting because the company’s many acquisitions across the globe have made it a true international player in the marijuana market.
From Australia to Germany, Canopy Growth has situated itself as one of the—if not the—premier marijuana company.
Its most recent acquisition in Colombia only further cements it as an international player in the marijuana market.
“This isn’t a strategy about more growing that we’ll try to send back to Canada or something like that,” said Mark Zekulin, president and co-CEO of Canopy Growth. “This is about building a Latin American market.” (Source: “alcohol companies have begun to sniff around the pot industry, looking to make deals.
The marijuana-infused beverages would sync nicely with Canopy Growth’s previous deal with Constellation Brands, Inc. (NYSE:STZ), a major U.S. liquor company. The deal was valued at CA$245.0 million and contained hints that the two were going to work on cannabis beverages several months ago.
Big alcohol/marijuana partnerships make sense for both sides of the deals. From the alcohol company perspective, you have a new vice that will be entering the legal market and directly challenging sales.
Considering how alcohol is typically considered to have more health-adverse effects compared to pot, it is only going to make a direct legislative challenge against pot harder. Marijuana and alcohol companies teaming up, then, would make more sense.
From the marijuana side, you have another product to sell to consumers who may not like the idea of smoking or popping pills. Marijuana companies also gain access to a network of resources from established multi-billion-dollar companies.
I wouldn’t be surprised if Canopy Growth becomes the first company out the door with marijuana-infused drinks.
Canopy Growth Stock Target Price
Here’s one major caveat to the Canopy stock forecast for 2019: marijuana market volatility.
Take one look at the following Canopy Growth stock chart and you’ll see what I mean.
Chart courtesy of StockCharts.com
Before the recent pullback, the stock price was up about 25% on the year. Over the past two weeks, however, those gains have been nearly halved, with CGC stock now about 12% up on the year, but declining.
The current Canopy stock price is roughly $26.50, when just a few days ago it was closer to $30.00.
My Canopy predictions are bullish, but I also see the luster of Canadian marijuana legalization wearing off in late 2018 and possibly leading to an industry-wide correction not unlike the one we experienced in the first half of this year (and the smaller one we’re enduring now).
What this means is that the Canopy stock forecast for 2019 is very much contingent on good news and strong sales in Canada. By “good news,” I mean further legalization across the globe.
Both good news and strong sales are possible, but there is a chance that either or both could stall, making my Canopy predictions far from a sure thing.
As for the Canopy Growth stock target price, I’d be comfortable with a 33% growth rate for the company in 2019.
The thing with that target price, however, is that it’s more of a median choice rather than an average. The growth rate could feasibly be anywhere from 10% to 100%, depending on the type of news generated next year.
From my perch here in mid-2018, however, I’d say that 33% growth seems most likely, pushing the Canopy Growth stock target price to about $35.00.
Other marijuana stocks will likely experience stronger growth, but at much higher risk. Canopy Growth is as solid as you can get in the marijuana sector at this time, and its gains are far less likely to be temporary, compared to gains by smaller companies.
The marijuana industry is about to undergo an exciting transformation. Gone are the days when it was a small, speculative market. Instead, we’re entering a time when legal marijuana is becoming Big Business.
The moves by Canopy Growth to situate itself as a global player, and being willing to take chances on innovative products like marijuana-infused drinks, make it one of the most enticing picks in the industry.
The strength of the company’s foundations and its dominant market position mean that the Canopy stock forecast for 2019 is looking great.
While there are no sure things in any stock market (and that goes double for the marijuana industry), there is a lot to like about Canopy Growth.
Regardless of whether the company marks huge growth in the next year or two, in the long term, few marijuana stocks rank higher than Canopy Growth Corp for me when it comes to growth potential.