Why the International Marijuana Market Is Key
Smart marijuana investors have always had their eyes fixated on the future. This industry, after all, is going to be global; of that there is no doubt. The question then becomes which company is best suited to lead the charge onto the world stage.
Right now, in my opinion, the top international marijuana stock for 2020 is Canopy Growth Corp (NYSE:CGC).
Projections have the global marijuana market hitting $130.0 billion within a decade if legalization continues to spread across the U.S., Europe, and Latin America. (Source: “Global cannabis market could be worth up to US$130B by 2029: Jefferies,” BNN Bloomberg, February 25, 2019.)
Even the most conservative estimate of the future marijuana market—assuming that no new country legalizes pot within the next decade (highly unlikely, bordering on impossible)—has it at $50.0 billion.
In other words, this is a very impressive industry with a ton of potential. The company that can capitalize on that potential is going to be the one with a foothold in the most important marijuana markets around the globe.
And that’s where Canopy Growth stock comes in.
CGC Stock Looks Strong for 2020
The cannabis industry standard-bearer, Canopy Growth Corp, has the largest market cap of any pot company for a reason: it has global appeal.
Based out of Canada, the first major economy to legalize marijuana, Canopy Growth has spread its operations around the world, most notably in the highly lucrative market of Germany.
In May, the company announced that it had acquired German-based Cannabinoid Compound Company (also known as C3 ).
This brought together the world’s largest pot company by market cap with Europe’s largest cannabinoid-based pharmaceutical company. (Source: “Canopy Growth Acquires Germany’s C3 Cannabinoid Compound Company,” Cision, May 2, 2019.)
The German weed market is massive, worth billions of dollars in the future. For now though, the country only permits medical marijuana.
Canopy Growth Corp is doing more than just exploiting the budding medical marijuana market in Germany though. It’s also positioning itself to have an foothold in the country in preparation for legalization of recreational pot.
This is a very smart move that will likely pay off, with Canopy Growth stock seeing huge gains when that time comes.
Another huge boon to CGC stock is that the company has an upper hand when it comes to the U.S. pot market, with its Acreage Holdings Inc (OTCMKTS:ACRGF, CNSX:ACRG.U) deal.
Canopy Growth has the option to purchase Acreage Holdings for $3.4 billion, with a mandate to exercise that right when cannabis production and sale becomes federally legal in the United States. (Source: “Canopy Growth Announces Plan To Acquire Leading U.S. Multi-State Cannabis Operator, Acreage Holdings,” Canopy Growth Corp, April 18, 2019.)
“Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible pathway exists,” said Bruce Linton, who was Canopy Growth’s chairperson and co-CEO when the deal was announced in April. (Source: Ibid.)
This puts Canopy Growth in the enviable position of having established positions in two of the largest cannabis markets in the world.
But there’s a catch: Canopy Growth may be changing its business strategy. Both of the above-mentioned deals were not cheap. In fact, the company’s current leadership is keen on seeing profits from its current positions instead of spending capital on expanding.
While focusing on profits instead of expansion is not a bad idea, it does mean that Canopy Growth Corp may eventually miss out on opportunities.
That’s what makes 2020 such an important year for Canopy Growth stock. This is likely the last time we’ll see an aggressive growth strategy from the company.
Growth strategies are purposely built to see huge payoffs down the line, which means the upcoming gains for CGC stock could be the highest it ever experiences. This makes 2020 a critical year for investors who are keen on getting in at the best moment.
Chart courtesy of StockCharts.com
As the above chart shows, we’ve already seen very impressive gains from Canopy Growth stock. Over the past month or so, CGC stock shot up 30%, and it looks like the gains will continue in 2020.
The marijuana industry is growing fast, and pot stocks are set to rise. The companies that are globally-minded are the ones most likely to see the biggest stock gains in 2020 and beyond.
Canopy Growth Corp is unique in that it already has a presence in almost every major marijuana market in the world. While its expansion strategy could change now that the company has new leadership, Canopy is still well positioned to profit in 2020.
Right now may be the last great opportunity for investors to get in on Canopy Growth stock and see massive gains.