CANOPY GROWTH CORP (OTCMKTS:TWMJF) has been perhaps the most dramatically interesting play in the Canadian cannabis patch over the past few months. As we know, the company grabbed attention by inking an enormously important minority stake investment last month from Constellation Brands (NYSE:STZ.B). Momentum has continued, for the most part, from that moment for this stock. And the company has done a great job of continuing to stoke the flames of interest.
The latest example of that will to succeed comes in the form of an extremely interesting new joint venture agreement that’s worth exploring. The announcement hit last week and involves several major players in the space: Green House Holdings North America Inc., National Concessions Group Inc., and Canopy Growth Corporation. Together, they represent three of the biggest global players in the cannabis space.
CANOPY GROWTH CORP (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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According to the release, “To establish the JV, Canopy Growth will allocate a portion of ownership in ACMPR-licensed Agripharm Corp., a 20,000 sq. ft. indoor growing facility located in Creemore, Ontario, to its new partners. Canopy Growth will retain 40% ownership of Agripharm, while Green House and Organa Brands will own 40% and 20%, respectively, of Agripharm. In exchange for the issuance of shares, Green House and Organa Brands have granted an exclusive, royalty-free license in Canada to certain proprietary technology, trademarks, genetics, know-how and other intellectual property to Agripharm, subject to compliance with applicable law.”
“Our business has separated itself from the competition by focusing on brands and products that resonate with people but also because we’ve found creative ways to collaborate with like-minded businesses to increase the breadth of our product offering,” said Mark Zekulin, President, Canopy Growth. “From world-class breeders like our partners DNA Genetics and now Green House Seeds, to sector innovators like Organa Brands, to cultural icons like Snoop Dogg, we work with the best in order to bring the best possible cannabis forward to our customers.”
Traders will note 43% during the past month in terms of shareholder gains in the name. This is emblematic of the stock. TWMJF has a history of dramatic rallies. In addition, the name has benefitted from a jump in recent trading volume to the tune of exceeding 260% over what the stock has registered over the longer term.
Earning a current market cap value of $1517M, TWMJF has a significant war chest ($116M) of cash on the books, which compares with 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%. You can bet we will update this one again as new information comes into view. 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.