CGC stock is showing solid buying activities in Wednesday’s session after Canopy Growth (TSX:WEED) (NYSE:CGC) announced the acquisition of This Works, a skincare company for 43 million pounds ($54 million USD) in cash.
CGC Stock Growth
The legalization of cannabis in Canada and parts of the United States has opened up a huge opportunity for companies which were quick to expand and corner the market. Canada based Canopy Growth is certainly one of them and over the past year or so, the company has expanded aggressively to emerge as one of the biggest players in the medical cannabis market.
Canopy Growth is one of the bigger producers of hemp, cannabis oil and CBD capsules and now it has decided to move to a new market altogether through its imminent acquisition of the skincare company “This Works”, which is based in London.
CGC stock is predicted to be one of the winners for 2019.
Canopy Growth Acquisition of “This Works”
“This Works” is a skincare company that was established in the UK in 2003 and has made a name for itself by selling a very niche range of products. Some of the products include wrinkle reduction moisturizers, pillow sprays, and eye care products among others.
As far as Canopy Growth is concerned, this is a highly strategic acquisition and it will help the company in producing cannabis-infused products meant for beauty and skincare. However, one of the most important news to come out of the announcement is the fact that cosmetics savant Martha Stewart is going to join in an advisory role in order to launch these products.
CGC stock is trading higher by 3% and now selling at $46.33 on the NYSE. On the other hand, WEED stock is up 3.28% at $62.30 on the CSE.
CBD Beauty Market Valuations
According to Jefferies, the CBD beauty market is expected to explode soon and it could be worth as much as $ 25 billion in 10 years.
Considering those valuations, it is safe to say that Canopy Growth’s $54 million investment on This Works is an eminently sound one and if the company can leverage the existing customer base of the skincare company, then the rewards could be noteworthy.
According to reports, Canopy Growth is going to help This Works with the production of skincare, beauty and sleep solution products that are going to be infused with CBD.
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