In an effort to secure continued growth, major cannabis companies have been competing among each other for international expansion opportunities. So far, two Canadian-based companies, Aurora Cannabis Inc and Canopy Growth Corp have been the biggest leaders in this regard, with Aurora perhaps edging out in this area.
Today Canopy announced that they had completed the acquisition of a Spanish licensed cannabis producer Cáñamo y Fibras Naturales, S.L. (“Cafina”), expanding the company’s footprint into the European nation.
Cafina is one of only three companies in Spain that has the approval to cultivate, distribute, and export cannabis with over 0.2 percent tetrahydrocannabinol (THC) concentrations for medical and research purposes, making the company an attractive international expansion target for many companies. Canopy Growth’s acquisition of Cafina is part of a larger planned expansion into Spain as it plans to move into other European nations as well.
“Operating multiple production assets within Europe will allow us to increase revenue in the EU free of supply constraints. This strategic acquisition in a scalable, low-cost production environment diversifies our owned production capabilities in Europe, similar to our approach in Canada where we have production facilities in seven different provinces,” said Canopy President and Co-CEO Mark Zekulin. “Adding Cafina will allow us to quickly build out our presence in Spain using its existing cultivation license as a launch pad, while ensuring our Canadian footprint – the largest in the world – can continue to serve the medical and recreational needs of Canadians.”
Many eyes will be focused on Canopy Growth in the upcoming weeks, with the cannabis giant still having to report their Q4 earnings results. Most marijuana businesses have been reporting net losses and a lack of profitability despite strong revenue growth, which has led to many stocks to slide down in response from the market.
Canopy Growth is still in an extremely strong position, but there is a growing possibility that they would miss their revenue expectations for the upcoming quarter. Last week, Scotiabank analysts cut their revenue predictions for Canopy by 26 percent, a significant decrease. Should Canopy disappoint investors, it wouldn’t be surprising to see a significant decline in stock prices that day with other cannabis companies falling by association.
Shares of Canopy Growth ended the day with a reasonable two percent gain. Early in the morning, stock prices spiked up to 5 percent within the first hour of trading before giving back some of those gains. For a company with a $19 billion market capitalization, major cannabis producers like Canopy still have significant intraday stock price volatility despite their massive size.
Canopy Growth Corp Company Profile
Canopy Growth Corp through its subsidiaries is the licensed producer of medical marijuana in Canada. The company grows, produces and sells medical marijuana. It operates diverse brands and variety supported by over half million square feet of indoor and greenhouse marijuana production. It sells medical marijuana under various brand names including Tweed, Bedrocan, and Mettrum. A majority of the revenue is derived from the sale of medical marijuana by Tweed and Bedrocan in Canada. – Warrior Trading News