CGC Stock Progression
Sometimes it helps to look back. The past, after all, can often inform the future. This truism holds in the stock market as well. Canopy Growth Corp (NYSE:CGC) has seen massive growth over the past three years.
CGC stock has seen over 2,000% growth in that time. That means, if you had invested $10,000 into the stock in 2016, you would have made $200,000 by now.
Those kinds of returns often only occur in dreams. But here’s the thing about Canopy Growth stock: I believe it’s just getting started, with the potential to double in 2019.
Before we get to my CGC stock prediction, let’s finish our retrospective of how Canopy Growth Corp got to where it is now.
The largest marijuana company has had many challengers, but none of them have been able to dethrone it as the premier marijuana company. This year has only continued to strengthen Canopy Growth’s position as the industry leader.
Chart courtesy of StockCharts.com
Starting at an old Hershey Co (NYSE:HSY) chocolate factory in Smiths Falls, Ontario, Canada, Canopy Growth has grown to be a global force in the legal marijuana trade. The company has operations in several continents and continues to expand within those markets.
It was the first publicly listed pot stock and, since that time, it hasn’t looked back.
This article would be thousands of words long if I were to list all the accomplishments that brought CGC stock to where it is now. So instead, I’ll highlight the most momentous development: the massive investments by Constellation Brands, Inc. (NYSE:STZ).
Constellation Brands is an international alcohol producer that invested twice in Canopy: first in late 2017 and then again in summer 2018.
Both injections of capital sent the entire pot stock market on an upswing on the back of the potential alone. We were finally seeing Big Alcohol enter the marijuana space through huge investments, a preemptive move to avoid losing huge portions of their market share.
After all, alcohol sales have declined in several markets where marijuana sales have increased. It makes sense: another leisure drug is entering the market and threatening alcohol’s (up until now) unrivaled hold on people’s wallets.
With marijuana in the game, however, there is a real and present danger facing Big Alcohol. The smart move, then, was to get out in front of the problem by buying up large stakes in marijuana companies.
Molson Coors Brewing Co (NYSE:TAP) had the same idea when it invested in Hexo Corp (NYSEAMERICAN:HEXO). It was the same with Altria Group Inc (NYSE:MO) of Big Tobacco buying up a big share of Cronos Group Inc (NASDAQ:CRON).
The point being, these investments were not only massive for Canopy Growth, but for all marijuana companies.
We saw hundreds of points of gains in a matter of months following these purchases, and they helped propel Canopy Growth to the position it is in now atop the marijuana industry.
Canopy has become the marijuana stock to watch after these investments—alongside a number of other big victories like international expansions, production capacity growth, and acquisitions.
So that’s how Canopy Growth stock got that 2,000% growth: being a first mover in an industry already ripe with potential.
But is there still time to make significant gains from Canopy Growth? Based on my CGC stock prediction, the answer, my friends, is a resounding yes.
CGC Stock Prediction
While I won’t go as far as saying there’s another 2,000-point increase in my CGC stock prediction, there is a very good chance that investors could double their money in 2019.
That’s based on a number of factors, of course, but 2019 has already made Canopy Growth stock investors happy. The share price is up 75% year-to-date.
Chart courtesy of StockCharts.com
And that’s because Canopy Growth continues to make all the right moves.
It was one of the first marijuana companies to announce that it was looking to enter the U.S. market in a big way following the country’s legalization of hemp at the end of 2018.
Several banks have declared the company a winner.
Its latest quarterly report also did not disappoint. Revenue skyrocketed by 282% in the quarter, climbing to CA$83.0 million, up from CA$21.7 million in the same quarter the previous year. (Source: “Canopy Growth Corporation Reports Third Quarter Fiscal 2019 Financial Results: Gross Sales of $98M; Net Revenue hits record $83M,” Canopy Growth Corp, February 14, 2019.)
This massive jump in revenue was helped along by a huge increase in sales that followed Canadian recreational marijuana legalization. The company sold over 20,000 pounds of cannabis in the quarter, a 334% increase from Q3 2018.
Canopy Growth also scored a major win with its intention to open a licensed retail location in London, Ontario in April 2019.
Remember that Ontario still has no brick-and-mortar marijuana retail spaces. Canopy Growth will finally be able to access the physical retail market in Ontario (Canada’s most populous and richest province) come April.
Even better, Canopy Growth partnered with Alimentation Couche-Tard Inc (OTCMKTS:ANCTF, TSE:ATD) for the London deal. Alimentation Couche-Tard is a massive Canadian convenience store operator with locations in Canada, the U.S., and Europe. (Source: “Alimentation Couche-Tard and Canopy Growth to Support Cannabis Retail in London, Ontario,” MarketWatch, February 21, 2019.)
This partnership has the potential to yield huge benefits down the line.
And it’s only been two months so far.
Canopy Growth has not slowed down a minute since it came onto the scene, and it doesn’t look like it will anytime soon, either.
The company has a lot of potential left in it. The U.S. market opening up would see marijuana stocks skyrocket in a matter of days. At this point, that’s more a matter of “when” rather than “if.”
While we most likely won’t see another 2,000% gain in the next three years, when it comes to my CGC stock prediction, I believe that long-term investors could see their investments double within a year and continue to grow strong as time goes on.
Canopy Growth remains one of my favorite marijuana stocks as it remains the darling of the industry.
There’s simply too much to like about the company. From competent leadership to an impressive brand to an international footprint, there’s a lot going in the company’s favor.
As such, I’d be surprised if CGC stock didn’t at least double within 12 months.