Canopy Growth Corporation (TSE:WEED) hopes to consolidate a market with several long-established smaller players
SmallCapPower | October 26, 2017: Canopy Growth Corporation (TSX:WEED) announced on Wednesday that it plans to expand its geographical reach to the Jamaican cannabis market through a strategic partnership with Grow House JA Limited. Grow House JA will operate as Tweed Limited JA to serve the needs of the Jamaican medical cannabis market.
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The Jamaican legislature voted to amend the nation’s cannabis laws in 2015, which led to the introduction of the Cannabis Licensing Authority (CLA). Since then, the Jamaican government has been developing a framework for the cultivation and sale of medical cannabis. Canopy Growth is confident that the production and formulation model it has built in Canada, combined with the strength of the existing team in Jamaica, will drive the national conversation around cannabis forward, and promote Jamaica’s well-established and renowned cannabis products on a global level.
Jamaica has a long-established cannabis culture, and there are questions as to whether or not this market is ripe for consolidation, as it is most likely highly fragmented with several small ‘Mom and Pop’ players.
Canopy Growth takes the top spot in the Canadian cannabis industry with almost 2x revenues as compared with its next competitor Aphria. Along with a strong market position, Canopy Growth has aggressive plans to further capture market share in both domestic and international markets. On the international expansion aspect, Canopy Growth has already entered into the German, Denmark, Brazilian, and Australian markets. Jamaica is the newest addition to the Company’s international portfolio. While the market in Canada is a big enough opportunity on its own, the potential of Canopy Growth to expand into international markets brings the scope of the available opportunity to a whole new level.
During the past three months, Canopy Growth shares have surged more than 50% due to increased investor interest and still seems to have plenty of upside potential once the marijuana market opens for recreational use. Canopy Growth currently trades at Price to Sales of 45.75x.
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