The German government partially legalized cannabis last week, and Canopy Growth Corporation CGC shares lit up. Canopy Growth CEO David Klein joined BNN Bloomberg on Friday to discuss what the legislation means for the company.
Growth Opportunities: Klein sees Germany's cannabis market growing from its current value of just under $500 million to over $2.5 billion in the next two years.
"We think that the market has the ability to grow 10x over the next several years. Most of the revenue is going to come through the medical channel, which is where you will see the commercial benefit for Canopy," Klein predicted.
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Canopy released a statement on Friday celebrating the legalization of cannabis in Germany and expressing its desire to expand its position as a top-three cannabis brand in the country.
“We are thrilled to be able to continue serving the medical community by delivering high-quality cannabis products that meet patient needs and we look forward to increasing our already leading presence in the German medical cannabis market,” said Tara Rozalowsky, chief growth officer and president, International, Canopy Growth.
Klein expressed similar views in the Bloomberg interview and noted that he sees the new German legislation opening a door to increased profitability for Canopy Growth.
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"Over the past few years, we've reset our business so that we could profitably take advantage of these sort of opportunities as we get regulatory unlocks, whether it’s in Germany or the U.S. and maybe even some progress in Canada," Klein said.
Retail Chimes In: Redditors in the r/weedstocks subreddit shared differing opinions on Canopy's prospects in Germany.
"CGC is competing with companies it failed to compete with in Canada. Why would it be any different in Germany? It makes no sense," posted u/LectureAgreeable923.
"Here's hoping the German market develops in a robust way like the Australian medical market," posted a more hopeful u/corinalas.
CGC Price Action: According to Benzinga Pro, Canopy Growth shares were up 23.1% at $7.62 at the time of publication Tuesday.
Image: asdqwejkl from Pixabay
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