Canopy Growth, the world’s leading pot producer, expects to increase its revenue to more than $1.04 billion in 2019 – 19 percent more than experts’ predictions.
President Bruce Linton says that Canopy has actually increased the rate of its merchandise packaging and shipping means and is arranging for sales expansion to hasten by the final quarter of 2019 as more shops open their doors to cannabis products.
“Our general view is that we have a company which, over the 12 months from April 1 through, is able to do more than $1 billion in revenue, and that represents a good slice of the market,” Linton said.
His bullish remarks come on the sidelines of a Toronto cannabis market gathering come one day after shares of licensed producer Aphria Inc. slipped by as much as 15 percent after its quarterly earnings disappointed analysts.
Constellation has high hopes for Canopy
Constellation Brands invested $5 billion in Canopy Growth in 2018 in a move which upped its ownership stake to 38 percent.
If Constellation employs all of its warrants, its ownership in Canada’s biggest pot company would grow to approximately 50 percent. The warrants expire in November of 2021.
While Constellation made nearly $500 million on its alcohol operations in the first quarter, the company’s earnings from the marijuana giant added a $1.2 billion in the form of Canopy securities.
While cannabis remains unlawful on a federal level, the plant has been legalized in some form in 33 states across the country and Washington DC.
The world’s leading cannabis brand wants to go global
Canopy Growth announced on Tuesday that it was gearing up to expand its European presence through the all-cash acquisition of Spanish licensed marijuana producer Cafina.
The Cafina deal is a prime example of Canopy’s development tactics. In addition to Cafina’s 1,600-square-foot greenhouse, Canopy likewise has a 430,000-square-foot production center in Denmark and an additional site in Germany.
The announcement led to a stock price gain of 2.11% by closing.
Mad Money’s Jim Cramer remains bullish
In a recent interview with Jim Cramer, the marketplace celebrity noted, “I think that Canopy could be the next Amazon because they’ve got the capital and they’ve got Constellation taking care of the liquids and they’re doing the medical. I would like to see a big medical investment, but that hasn’t happened yet,”
There’s still a substantial opportunity here. However, there’s likewise a significant evaluation. Even the $1 billion target implies that there is still a lot of work to be done.
Canopy Growth still is a few years from being profitable.