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Wells Fargo Shares Takeaways From Canopy Growth CEO's New York Presentation

Wells Fargo Shares Takeaways From Canopy Growth CEO's New York Presentation

On Dec. 11, the Consumer Analyst Group of New York hosted a group luncheon where Canopy Growth Corp. (NYSE: CGC) CEO Bruce Linton presented.

Wells Fargo analysts attended the luncheon and presented their main takeaways. Overall, the analysts said they are optimistic about the company's prospects and its relationship with Constellation Brands, Inc. (NYSE: STZ)

Wells Fargo's Main Takeaways

Wells Fargo analysts did not provide their outlook on Canopy Growth's stock, but cited a number of positive aspects from Linton's presentation.

Canopy Growth is expected to see more revenue, as its supply constraints were mainly caused by government bottlenecks, analyst Bonnie Herzog said in a note. In addition, the company has adequate production assets in Canada, with 4.3 million square feet of production facilities and 1.7 million pending, she said.

As s it completes its investments in Canada, CGC will continue to increase its presence in international markets and introduce more products.

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Regarding the collaboration with Constellation Brands, which acquired a 38-percent stake in Canopy Growth, Herzog noted the upcoming release of CBD-infused beverages the companies are developing. (See her track record here.) 

Canopy plans to launch a scalable, calorie-free and transparent beverage with a quick onset and long shelf life, the analyst said.

Canopy plans to begin trials for a cannabidiol, or CBD, sleep aid in January, according to Wells Fargo. 

Canopy To Enter US Market

Wells Fargo believes Canopy Growth is well-positioned to enter the U.S. market following the descheduling of hemp in the pending 2018 US Farm Bill and the transfer of its supervision to the Department of Agriculture from the Drug Enforcement Administration.

Herzog noted the FDA's role in hemp regulation "given the emergent nature of the category and clear lack of longitudinal data."

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Latest Ratings for CGC

Feb 2020Stifel NicolausMaintainsBuy
Jan 2020BMO CapitalUpgradesMarket PerformOutperform
Nov 2019Bank of AmericaUpgradesNeutralBuy

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