CGC stock is up on Thursday after Canopy Growth (TSX:WEED) (NYSE:CGC) announced a new joint venture with rap superstar Drake to launch More Life Growth Company, a licensed cannabis firm based in Drake’s home city Toronto.
Potline Bling Partnership Boosts CGC Stock
The new entity will take up residence in a production facility in Scarborough, Ontario, which is fully licensed to cultivate and process cannabis for recreational sale. Canopy will operate the facility and take full charge of distribution while retaining a 40% stake in the company following the issuance of shares, with Drake controlling the other 60%. Following news of the partnership with one of the most famous faces in the world, CGC stock is up 0.26% on the NYSE.
“Drake’s perspective as a cultural leader and entrepreneur combined with Canopy Growth’s breadth of cannabis knowledge will allow our new company to bring an unmatched cannabis experience to global markets,” said Canopy Growth CEO Mark Zekulin in a press release. Drake is not the first big name to team up with the leading cannabis firm; celebrity chef and cannabis connoisseur Martha Stewart signed up to launch a CBD collaboration with Canopy. News of that deal also sent CGC stock upwards.
While the partnership has obvious financial benefits for Drake, Canopy will be hoping that bringing on a star of the caliber of the four-time Grammy winner will help boost the company's bruised reputation. CGC stock is down over 60% in 2019 following the high profile dismissal of the company's founder and industry leader Bruce Linton in light of several quarters of steep losses.
What to Expect From Canopy's Earnings
Canopy Growth will report its Q2 earnings on November 14, following a loss of over $1 billion CAD in the previous quarter. Analysts expect the firm to report revenue of $112 million CAD for the quarter, and $547 million CAD for the year, which would fall well short of the previously predicted figure of $1 billion CAD. Those earnings could have severe consequences for CGC stock, which is currently hovering above a year-low at $19.47 USD.
Featured Image: Canva