CANOPY GROWTH CORP COM NPV (OTCMKTS:TWMJF) continues to rip higher in recent trade, along with the Canadian cannabis patch in general. As we have long held, because of its lack of transparency protocols and less well-established reporting standards, we would spot Canopy as likely carrying more short interest at any one time than the likes of the Aurora or Aphria. Hence, when we see bouts of broad momentum, those shorts are there to squeeze and we often this stock enjoy the most rapid bump.
This time around has been no different, with shares jumping over 30% in that last couple weeks. That move got some help this week as the company grabbed some more supply chain market share through a new supply and sales agreement with Valens Agritech Ltd., a Health Canada Licensed Dealer. According to the release, the deal involves distribution, marketing and sale of Valens branded products through Canopy Growth’s extensive CraftGrow distribution network, including Tweedmainstreet.com, and is set to take effect upon Valens securing a Health Canada license under the Access to Cannabis for Medical Purposes Regulations.
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 noted above, the company helped feed the stock’s momentum last week by announcing a new supply and sales agreement with Valens. The deal is actually a little odd considering that Canopy has been structured as a vertically integrated player. This smacks of some execution hurdles not yet properly dealt with. But the market hasn’t turned on it at this point, and may see it as a demand indicator.
“We welcome Valens to the Canopy Growth family and look forward to collaborating with their team to provide a steady and high-quality source of cannabis products to increase product variety for our customers,” said Mark Zekulin, President, Canopy Growth. “CraftGrow aims to build an ecosystem of fantastic options for patients and we look forward to including the Valens offering into our shop and onto store shelves as we continue our work through provincial jurisdictions to establish a national presence for our brands and our partners.”
We’ve witnessed 31% during the past month in terms of shareholder gains in the name. This is emblematic of the stock. TWMJF has a track record that includes a number of dramatic bounces. Moreover, the stock has benefitted from a jump in recent trading volume to the tune of nearly 210% above the average volume levels in play in this stock over the longer term.
Earning a current market cap value of $1045.7M, 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%. We will update the story again soon as developments transpire. 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.