Why CGC Stock Is Still Your Best Bet in the Marijuana Industry

Why-CGC-stock-is-best-bet-in-marijuana-industry
iStock.com/Yelantsevv

CGC Stock Forecast

It’s been a strange month for the marijuana industry in that Canopy Growth Corp (NYSE:CGC) didn’t dominate headlines.

Instead, Tilray Inc (NASDAQ:TLRY) sucked up all the oxygen with its massive swings on the market. It even overtook Canopy Growth in market cap for a brief time, and the two have been jostling for the title of largest marijuana company ever since.

Does that mean that Canopy Growth stock is old news, and done making gains? Nothing could be further from the truth, and in my mind, the CGC stock forecast is as bright as it has ever been.

Despite the fact that TLRY stock has been grabbing headlines with its sporadic movement in the marijuana stock market, Canopy Growth continues to impress—even if it is doing so quietly.

Advertisement

First, let’s remember why investors loved CGC stock in the first place: the massive partnership with Constellation Brands, Inc. (NYSE:STZ).

The roughly $4.0-billion investment from the alcohol producer was the single biggest injection of capital we’ve seen in the industry to date. Not to mention that this partnership caused the whole marijuana stock market to swell upward.

Tilray, for all its stock gains, has not generated any sort of industry-wide push through investments and deals. Instead, the company has mainly benefited from a massive amount of interest that has built up ever since the stock debuted on the Nasdaq as the first ever marijuana initial public offering (IPO) on a major U.S. listing.

As such, Tilray is mainly being propelled by hype and potential, while Canopy Growth has been registering concrete wins that justify its meteoric rise.

That isn’t to say that Tilray stock is a bad pick. Far from it. But when comparing the two companies, it’s an easy choice as to which one is poised for long-term sustainable success, and which one is much more of a wild card.

And then you have the strong leadership behind Canopy Growth.

While Tilray has grabbed its fair share of headlines following titillating comments from its executives, Canopy’s leadership is laser-focused.

Take the recent comments from CEO Bruce Linton. In an interview concerning Ontario’s new marijuana legislation, Linton offered a concrete plan to overcome some of the province’s new legislative roadblocks, such as limiting cannabis producers to just one retail store at each production site.

“It’s like a game board of snakes and ladders that gets drawn over again every day,” said Linton. “We’ll work our way through whatever we can open. If we can license the Tweed brand to stores for a dollar, or for free, if possible, without contravening the rules, then we’ll look at doing something like that.” (Source: “Ontario’s retail pot plans has Canopy eyeing partnerships: Linton,” BNN Bloomberg, September 27, 2018.)

That Canopy Growth is ready and willing to license its brand out in order to reach a wider audience is a good move to help overcome what is essentially a barrier to big business in Ontario’s marijuana industry.

Considering that Ontario is the most populous and richest province in Canada, Canopy Growth being able to circumvent these obstacles in pursuit of growing its brand is going to be key to the future of CGC stock.

These are just several examples of the ways that the company is not only planning for the marijuana industry of today, but also for the marijuana industry of tomorrow.

Not to mention, the company has made multiple international expansions in markets ranging from Latin America, to Germany, to Australia.

Analyst Take

There’s no doubt in my mind that the CGC stock forecast is positive. The company has proven its doubters wrong time and time again, and it remains the most trusted company in the marijuana industry.

With strong gains, without the intense volatility seen in other cannabis stocks, Canopy Growth stock remains my premier choice in the legal marijuana industry.