CGC stock is making gains this week after Canopy Growth (TSX:WEED) (NYSE:CGC) announced that it has formally entered the US CBD market with the launch of its hemp-derived brand First & Free.
Canopy's new brand will be available in 31 states where CBD products are currently legal and will see the Ontario-based firm sell softgels, oil drops, and topical cream products, among others. Despite the US federally legalizing hemp-derived products last year with the passage of the updated Farm Act, the FDA said last month that it cannot conclude the cannabis compound’s safety in human or animal food products. Nonetheless, the CBD market is still worth over $2 billion USD, and CGC stock is sure to be a big gainer given its expertise in the area.
Health Concerns Linger on Pot Stocks
Health concerns remain an issue for cannabis companies hoping to benefit from the booming market, with the onset of the vaping crisis a major blow for pot stocks in North America. Recently, Apple (NASDAQ:AAPL) dropped almost 200 mobile apps from its store that have anything to do with vaping in response to the escalating health crisis, which has claimed nearly 50 lives in the US. Given Canopy Growth's huge investment in vaping technology, the crisis could have some serious long-term repercussions on CGC stock.
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Canopy Growth responded to Apple's decision to drop vaping-related apps by declaring it a "knee-jerk reaction." Peter Popplewell, Canopy’s Chief Technology Officer, said, “It’s unfortunate that Apple made the decision to cast a very broad net and take down all vaporizer-related apps [...] It’s a bit of a knee-jerk reaction that really stems from the unregulated space that is in the U.S. right now.” According to Popplewell, Canopy spent two years developing its vape technology. CGC shares are currently trading for $19.15 in New York, up about 1% in intraday trading.
2.0 Optimism Driving CGC Stock Recovery
Although CGC shares are only making marginal gains today, the stock has been in recovery in recent weeks after slumping to a two-year-low in mid-November after posting hugely disappointing earnings. While the shadow of the vape crisis lingers over pot stocks, optimism ahead of the 2.0 market appears to be buoying investor optimism into the New Year.
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