CANOPY GROWTH CORP COM NPV (OTCMKTS:TWMJF) is looking for diversification. The impetus is a group-wide pursuit for the bigger producers given the huge rush into the marijuana market of so many new growers. That supply growth has paired up with huge piles of cash at the bigger mainstays to produce a rush for diversification of revenue streams.
The latest manifestation of this trend is embodied in the company’s most recent announcement. To wit: they have signed a definitive license agreement for Skinvisible’s patented topical formulations. According to the agreement, Canopy Growth is exclusively licensed to distribute Skinvisible’s topical products in Canada and shall have a first right of refusal for all other countries, excluding China and the United States.
CANOPY GROWTH CORP COM NPV (OTCMKTS:TWMJF) is one of the bigger growers. 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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As covered above, we are seeing a very similar trend among the high-cash balance sheets in the cannabis production space: the push to diversify revenue streams into different market segments as the number of new growers rises. In Canopy’s case, the latest move is ostensibly into topical hemp-based products using the Invisicare technology
“This agreement will have an immediate impact on our hemp product lines as this proven technology can be applied to a hemp oil product in today’s regulatory environment,” said Mark Zekulin, President, Canopy Growth. “Moving forward, cannabis product diversity will be increasingly important, and this agreement prepares us for future product opportunities on that side of our business, if and when the regulatory environment evolves.”
“This agreement with Canopy Growth Corporation is a significant milestone for Skinvisible,” said Skinvisible President Terry Howlett. “Canopy Growth is the leader and innovator in the cannabis space with over half a million square feet of GMPcertified cannabis cultivation, a robust hemp operation, multiple commercialized brands in Canada, and rapid international expansion and partnerships underway including Germany, Australia, Brazil, Chile, Denmark and Spain. Canopy Growth is the perfect partner to take Skinvisible’s topical products globally, always in keeping with its reputation for only pursuing federally legal opportunities.”
We’ve witnessed 20% during the past month in terms of shareholder gains in the listing. The situation may be worth watching. TWMJF has a history of dramatic rallies. In addition, the stock has witnessed a pop in interest, as transaction volume levels have recently pushed 51% above its longer run average levels.
Earning a current market cap value of $902.9M, TWMJF has a significant war chest ($116M) of cash on the books, which stands against about $1.7M in total current liabilities. One should also note that debt has been growing over recent quarters. TWMJF is pulling in trailing 12-month revenues of $48.8M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 127.3%. As more color becomes clear on the name, we will review the situation and update our take. 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.