Canopy Growth Corp: This News Could Mean Massive Gains for CGC Stock
Canopy Growth Corp Rallying After Major Meltdown
The House Judiciary Committee passed the Marijuana Opportunity Reinvestment and Expungement Act of 2019 (MORE Act) on November 20. This bodes very well for the pot sector, as the proposed move would legalize the use of marijuana federally.
And Canopy Growth Corp (NYSE:CGC), currently priced at an attractive level, would benefit greatly!
We are seeing rising legal marijuana sales across the U.S., and the positive trend is forecast to continue. Pot growers are expanding their infrastructure and driving capacity higher, which bodes well in anticipation of the strong growth expected for cannabis products.
Why CGC Stock’s an Intriguing Risk/Reward Play
Canopy Growth is based in Canada, but the vertically integrated grower and seller operates in over 12 countries and five continents. In fact, it has over five million square feet of licensed globally/commercial-scale good manufacturing practice (GMP) manufacturing space.
In the lucrative U.S. pot market, Canopy Growth is in the process of completing its previously announced deal to buy Acreage Holdings Inc (OTCMKTS:ACRGF, CNSX:ACRG.U). Acreage Holdings holds 88 dispensary licenses in 17 states and 24 growing/processing licenses in 16 states.
On the chart, Canopy Growth stock’s recent recovery around $20.00 is positive as the stock looks to break higher at trendline resistance, with a potential move toward the 200-day moving average at the mid-$30.00 level.
Chart courtesy of StockCharts.com
Analyst Take
Canopy Growth is a top pot stock. Armed with around CA$2.0 billion in cash, the company has sufficient funds for capital expenditures. Canopy Growth Corp is also expected to ramp up its annual revenues to as high as CA$1.4 billion by fiscal 2021. (Source: “Canopy Growth Corporation (CGC),”Yahoo! Finance, last accessed November 21, 2019.)
For aggressive risk capital, CGC stock is priced for longer-term gains. When the pot sector stabilizes, stocks like Canopy Growth will rally.
The key to buying pot stocks like Canopy Growth is to enter in tranches, with small positions, especially at times when the stock is being sold off.
By taking this approach, investors in Canopy Growth stock will likely be rewarded in the long term once the weed sector further builds its infrastructure and sales rise.
