Constellation Brands Inc. (NYSE:STZ) Gives Canadian Cannabis Company Legitimacy and Cash

Constellation Brands Inc. (NYSE:STZ) Gives Canadian Cannabis Company Legitimacy and Cash

Constellation Brands Inc. (NYSE:STZ) Gives Canadian Cannabis Company Legitimacy and Cash

$STZ, $CGC, $ACBFF

Canopy Growth Corp.’s  (CGC) CEO, Bruce Linton expects 1 “Google-like company” to dominate the legal cannabis industry.

Canopy’s transformative deal with Constellation Brands Inc. (NYSE:STZ) has given it legitimacy, clout and a cash hoard that has widened the gap with its competitors.

Note: Constlation Brands is the brewer of Corona Beer, and is planing a cannabis infused line fbeverages,

The deal has boosted Canopy’s stock 56% since Constellation’s $3.8-B investment for a 38% stake was announced last week. That brings its market value to about $9-B, in the same league as plane maker Bombardier Inc. and retailer Canadian Tire Corp. and a fed billion more than its nearest competitor Aurora Cannabis Inc (OTCMKT:ACBFF)

Canopy is now the biggest company on Canada’s increasingly cannabis-dominated healthcare index, surpassing Bausch Health Cos., the former Valeant Pharmaceuticals, for the 1st time Monday.

After the Constellation deal, Canopy will have 12X more cash than any of its Canadian competitors and almost as much cash on hand as the approximately $5.5-B that has been raised in the entire Canadian cannabis industry to date, according to analyst at Canaccord Genuity Group Inc.

The company had $500-M in cash and equivalents at the end of 2-Quarter bringing its total potential cash pile to about $4.3-B when adding the Constellation infusion.

With the $4-B+ added to the balance sheet later in October, we believe Canopy is now best suited  to expand it platform further.

Canopy CEO Bruce Linton said he plans to use the cash to expand cannabis production globally, including into the all-important US market once federal laws allow it.
Symbol Last Trade Date Change Open High Low Volume
NYSEA:CGC 40.08 22 August 2018 1.41 38.11 40.4 36.65 15,860,600
HeffX-LTN Analysis for CGC: Overall Short Intermediate Long
Bullish (0.39) Bullish (0.35) Bullish (0.44) Bullish (0.38)
Stay tuned…

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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