Canopy Growth Corp. (TSE: WEED) currently has a higher market cap than some more well-known and well-established stocks on the TSX.
Meanwhile, the stock has seen over 120% growth since the start of 2018 and a very drastic jump of more than 1,620% since 2016. This is partly because the company created a distribution centre next to their production facility, investing $50 million to make the 80,000-square foot centre capable of labeling and packing the product in an automated process.
The Smiths Falls, Ontario, headquarters are on track to produce 15 tonnes of product, while processing capabilities for oils, gels, and dried cannabis average out to 115,000 jars per eight-hour shift – when the six lines the centre boasts are running at full capacity.
All of these potential facts and figures will come to a head with the reality of demand in the coming month, as recreational marijuana sales will become legal starting October 17.
Experts say the demand may stay higher than production realities for as long as two years. However, the actual market share Canopy Growth will garner remains uncertain, keeping growth and profit theoretical, which means the answers will be apparent after legalization occurs and the ensuing full quarter ends.
Numerous factors give Canopy Growth the advantage, at least prior to the start of sales. Those factors include the fact that Canopy Growth has the largest supply agreement volume, the most production capacity and the largest inventory – all compared to the other large cannabis growing companies in Canada. They also have the most capital, with a $5 billion investment from Constellation on the books.
This will provide a unique advantage to move aggressively when new markets open, something other companies envy but may not be able to emulate. Considering the fact the US cannabis market may have the potential to reach $90 billion in the coming decade, Canopy Growth is poised to benefit greatly there as well.