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Canopy Growth Corp (NYSE:CGC) kicked off 2019 with a 53-percent run. It hasn’t even begun to strike its high, according to one analyst team.
The Rating
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Piper Jaffray analysts Michael Lavery and Jeffrey Kratky maintained an Overweight rating on Canopy Growth and raised their price target from $40 to $60.
The Thesis
Despite cutting ramp forecasts to more conservative rates, Piper Jaffray considers Canopy Growth well positioned in global cannabis — a market expanding into a $250 billion to $500 billion opportunity.
“We believe the long-term growth can be significant — both from transitioning illicit trade to legal sales, medical sales, and from transitioning sales in health and wellness categories to CBD-infused products,” Lavery and Kratky wrote in a note.
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They expect Canopy Growth to rake in $15 billion to $50 billion near term, particularly given recent expansion both in geographic and consumer reach. Last week, the company penetrated the blossoming U.S. market with a New York license. Management plans to invest $100 million to $150 million in a production and processing facility there.
“Canopy has hemp-specific IP, cash reserves, and technical expertise that should position it well in the US hemp and CBD market,” the analysts wrote. “Though we do not yet have more specifics on its plans, we believe this tangible step into the US is a clear positive and makes us more bullish on its outlook for sustainable growth.”
The firm also partnered with Greenhouse Juice Company to add cannabidiol-infused beverages to its portfolio. At the very least, the arrangement expands visibility in Canada.
Price Action
At time of publication, Canopy Growth shares traded up 5.7 percent at $46.71.
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Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.