Canopy Growth Corp (OTCMKTS:TWMJF) Locked in a Strong Upward Trend


Canopy Growth Corp (OTCMKTS:TWMJF) has been consolidating in a lateral range but remains locked in a strong upward trend, powered by a fortress balance sheet, strong growth, and a major sector tailwind. Canopy just announced that it has entered into a supply and production agreement – which it notes is “the largest provincial cannabis supply agreement announced to date” – securing a regulated supply of cannabis for Newfoundlanders and Labradorians heading into the legal adult access market.

According to the release, “Canopy Growth will supply 8,000 kg of high-quality cannabis products annually for the first two years of the deal. Under the terms of the agreement, Canopy Growth will establish a new production facility in Newfoundland and Labrador capable of producing 12,000 kg per year, bringing 145 jobs in an emerging sector and major capital investment to the region. Site locations are being evaluated to house what could be the first licensed production facility in the province.”

Canopy Growth Corp (OTCMKTS:TWMJF) is one of the bigger growers in the industry. The company produces and sells medical marijuana in Canada. It offers dry cannabis and oil products primarily under the Tweed and Bedrocan brands. It also sells its products through online.

According to company materials, “Tweed is the most recognized marijuana production brand in the world. It has built a large and loyal following by focusing on quality products and meaningful customer relationships. Tweed doesn’t just sell marijuana, it facilitates a conversation about a product we’ve all heard about but haven’t met intimately yet. It is approachable and friendly, yet reliable and trusted. As marijuana laws liberalize around the world, Tweed will expand its leading Canadian position around the globe.”

Also from their materials, “Bedrocan is the epitome of medical-grade cannabis. Bedrocan BV pioneered medical cannabis in Holland through decades of selection and refinement, leading to standardized, whole bud cannabis strains that patients can rely on. Bedrocan Canada supplies the same standardized strains to the Canadian market through exclusive licensing rights to the American continents, an arrangement it will also enjoy for all future genetic advancements. Due to its consistency over time, Bedrocan’s strains have been used in clinical research in seven European countries. That commitment to research didn’t stay on the east side of the Atlantic – Bedrocan Canada recently launched one of the largest clinical cannabis studies in the world, the EQUAL Study, to evaluate quality of life before and after medical cannabis use.”

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“This agreement today with an internationally recognized producer not only guarantees a safe supply of cannabis for Newfoundland and Labrador before the federally imposed July 2018 implementation date, but also results in the creation of 145 new jobs in our province,” said the Honourable Christopher Mitchelmore, Minister of Tourism, Culture, Industry and Innovation, Newfoundland and Labrador. “We will also use this as a framework for other agreements related to cannabis supply and production. Our vision is for an industry which leads to production, job creation, supply chain development and research and development in this province.”

Canopy’s operations will soon stretch from Coast to Coast, with locations now planned in seven provinces including Newfoundland and Labrador,” said Bruce Linton, Chairman & CEO, Canopy Growth. “Wherever we operate we look for ways to integrate ourselves into the local community to make sure we are giving back to the communities we call home.”

We’ve witnessed 6% during the past week in terms of shareholder gains in the stock. This is emblematic of the stock. TWMJF has a history of dramatic rallies. In addition, the listing has seen interest climb, with an increase in recent trading volume of just shy of 150% over the long run average.

Currently trading at a market capitalization of $1587.4M, TWMJF has a significant war chest ($108.9M) of cash on the books, which compares with about $1.6M in total current liabilities. TWMJF is pulling in trailing 12-month revenues of $57.9M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 106.7%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $TWMJF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $TWMJF, either long or short, and we have not been compensated for this article.