Shares of Canopy Growth Corporation (TSE:WEED) have rallied more than 40% since its early June 2017 lows
SmallCapPower | September 12, 2017: Canopy Growth Corporation (TSX: WEED) and its wholly-owned subsidiary Spektrum Cannabis announced on Monday a supply license agreement with Alcaliber, a leading player in the international pharmaceutical industry based in Spain. Alcaliber specializes in research and development, breeding and cultivation, and the extraction, purification and preparation of Narcotic Raw Materials (NRM) and Active Pharmaceutical Ingredients (APIs). This agreement is the first of its kind between a Canadian cannabis company and a significant, established international pharmaceutical player.
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Alcaliber is a proven global leader in pharmaceutical industry with an established track record of producing NRMs and APIs. Alcaliber also has existing production infrastructure and distribution networks in place. So, this partnership will help Spektrum’s strategic expansion in the European market.
Canopy Growth Corp’s shares climbed 3% on Monday, buoyed in part by the positive regulatory news released last Friday. Ontario, Canada’s largest province, plans to sell and distribute recreational pot exclusively through a network of government-operated stores. This development will likely boost the dominance of the country’s large-scale licensed marijuana producers, such as Canopy Growth, and weed craft growers out of the market.
Canopy Growth Corp also announced Friday that its wholly-owned subsidiary, Tweed Farms Inc., has finalized the purchase of a parcel of land adjacent to its current facility in Niagara-on-the-Lake, Ontario, including an operational 458,000 sq. ft. greenhouse.
Currently Canopy Growth trades at TTM price to sales value of 33.22x, price to book value of 2.45x and forward PE of 55.76x. Canopy Growth stock continued to move higher in early Tuesday trading, up 2.5% to $9.72. Its shares have rallied more than 40% since its early June 2017 lows.
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own shares in the company mentioned above.
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