The Power of the Right Partnership: Constellation has Set Canopy Stock Alight

Good Cannabis Investment

On August 14th, Canopy Growth Corp (TSX:WEED) stock sat at $32 per share. The following day, one very significant investment was announced, and it changed the trajectory of this stock. It showed the power of a good cannabis investment.

Good Cannabis Investment

Constellation Brands (NYSE:STZ), the drinks company behind Corona beer, signed off on a whopping $4 billion investment deal to create cannabis drinks with Canopy. The investment set not only Canopy stocks alight, but the entire marijuana market too. It was the sign of a good cannabis investment.

August 15th saw the shares skyrocket and today—7 weeks on—the stock continues to sustain itself with gains that represent a massive 100% growth.

Over Time

But this was not Constellation Brands’ only investment into Canopy Growth. Oh no! In October last year, it bought a 9.9% stake in the company. It seems Constellation’s interest in Canopy really gave credit to this stock, as from then on, Canopy began to truly grow. In fact, it grew to the tune of 285% to be precise.

The figures look like this; WEED stock currently sits at $62.48. At its highest, it reached $68.83. This time last year, however, one of these shares would set you back $12.67. Again I say, that’s the power of a good cannabis investment because that is some growth.

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Stock Gains Translate to Revenue

But here’s where it gets interesting. WEED stock has seen success. STZ stock, however, fell on the most recent deal but it has paired those losses since.

Reality is that Canopy’s stock gains translate into major profits for Constellation which, after both investments, now owns 38% of the company. Surely this offsets any lost revenue from any ailing STZ stock.

So even before a single cannabis-infused drink has hit the shelves—the main money-making reason for this partnership—both companies have already made significant profits off the back of Canopy’s skyrocketing shares.

Profit is already estimated to be near $1 billion USD.

Are you impressed? I know I am.

Good Cannabis Investment

Rob Sands, Constellation’s CEO said in a statement:

“Our $4 billion investment in Canopy Growth provides us with a strong foothold in the emerging global cannabis market, which could be one of the most significant growth opportunities of the next decade.” 

But this “$4 billion investment” has arguably offered Canopy equal growth opportunity if we look at how it has grown since cozying with its new bedfellow.

Such is the power of the right partnerships and a good cannabis investment.

Featured Image: Depositphotos/© violetkaipa