Canopy Growth Stock Jumps After Canadian Senate Marijuana Vote
Few industries are as reliant on the news and on government policies as marijuana. With laws that need to be sorted out for marijuana’s transition from illicit drug to legal product, it only makes sense that stocks would ebb and flow with the daily news. The latest example of this took place last week, when Canadian recreational marijuana scored a big victory with a vote in Canada’s Senate sending the legalization bill to second reading.
A number of marijuana stocks were on the receiving end of a boost, but one of the most prominent ones was Canopy Growth Corp (OTCMKTS:TWMJF, TSE:WEED). Canopy Growth stock, on the back of the good news, appears ready to begin its recovery, following a period of relative inactivity.
You see, the marijuana industry downturn that started in mid-January and ran through February hit many of the strongest marijuana stocks hard, but Canopy Growth stock has continued to be one of the better performers, despite the setback.
Canopy stock was hurt by the downturn—there’s no doubt about that—but it has found ways to create growth even in these tough times, with Canada’s latest legislative win just another example of a Canopy Growth stock booster.
While the company had no significant way to influence the result of the Senate vote, it is important to note that Canopy was one of the bigger winners among prominent stocks.
Canopy stock is up nearly five percent over the past five days. Not a bad pickup, especially considering that 2018 has been a muted year for many of the larger-cap marijuana stocks.
Chart courtesy of StockCharts.com
Where Canopy Growth stock has truly strived is in creating buzz around itself. One of the biggest wins for WEED stock in 2018 came when the company announced that it was looking into a Nasdaq listing.
Cronos Group Inc (NASDAQ:CRON) was the first and, so far, the only purely marijuana company to list on one of the major U.S. stock exchanges. One of the major reasons that companies have been reluctant to do so is that there is trepidation from investors and producers over what is and isn’t permissible in the U.S., especially considering that federal law still prohibits cannabis.
CRON stock received a huge boost when it listed on the Nasdaq, although that has since subsided. Nevertheless, the overall effect of listing on the Nasdaq has been to expand Cronos stock’s visibility among investors.
Canopy Growth, meanwhile, followed Cronos shortly after with a press release stating that it had been looking into the Nasdaq for some time now, going at least as far back as November.
Canopy had to delay its plans for the U.S. exchange due to a blockbuster deal it made with an alcohol company in the U.S., Constellation Brands, Inc. (NYSE:STZ).
Whatever the reason for the delay in listing on a U.S. stock exchange, Canopy Growth stock shot up by double digits in the few short days following the company’s announcement.
It’s important to note that, while CRON stock and Canopy stock both received boosts from their Nasdaq plays, Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB) tried to follow suit but was unable to capitalize. Its own announcement received little fanfare or market results.
This speaks to the savvy of Canopy Growth. It saw an opportunity to generate buzz (and hopefully a stock price boost) and it pounced. Not only that, the company did so in the right way, with evidence backing up its claim and enough supporting information to create genuine value.
In contrast, the announcement by Aurora fell flat precisely because it was handled in a less elegant and substantiated way.
Canopy Growth Stock Forecast
Canopy Growth stock has been, and remains, the legal marijuana industry standard bearer. While other companies are coming close to challenging WEED stock for market cap dominance, at the moment, Canopy still wears the crown.
It is one of the more reliable stocks in an extremely volatile market. Whereas smaller and more nimble companies shoot up and down with greater force, Canopy stock is a more reliable pick that still has great potential to generate double-digit and triple-digit gains.
I foresee Canopy Growth stock being one of the bigger winners following Canadian marijuana legalization.
As evident by the success of the recent vote in the Canadian Senate, Canopy Growth stock is often one of the first stocks we think of when we consider weed legalization in Canada.
I believe that its dominant market position and trusted name will put it in a place of power when legal marijuana hits store shelves this summer.
I project that we’ll see strong double-digit gains, perhaps even 50% by summer’s end. While I believe that this will be followed by a sizable correction in the immediate aftermath, I anticipate Canopy Growth shares to be up by at least 20%–30% by fall.
The movement on marijuana legalization in Canada has a profound effect on a number of marijuana stocks, but perhaps none are as impacted by the law as Canopy Growth.
With its market position being so prominent, Canopy Growth stock often rises and falls with the Canadian marijuana legalization news. But aside from those uncontrollable variables, Canopy has done a great job positioning itself as a trusted company for many sellers.
The company has made a number of smart moves that have contributed to its relatively strong stock performance this year.
All these factors combine to make Canopy Growth stock one of the stronger picks out there.