According to our Subjective Probability + Game Theory algorithm (SP+GTM), there are an estimated 312 million cannabis consumers globally, equivalent to 4.1% of the world ‘s population; and more importantly, these consumers collectively spend approximately $421 billion each year on cannabis across legal and illicit markets. Understanding these numbers, and what we have been broadcasting since our Cannabis News platform was added to the site, cannabis companies are finally addressing the retail markets with acquisition strategies targeting premier retail brands.
A case in point is Canopy Growth Corporation (CGC) $49.56. Notwithstanding that CGC is a marginal investment with limited potential (more on the subject in our conclusion), the direction the company has taken with produce branding warrants telling:
In September 2018, Canopy Growth Corporation (CGC) announced the closing of the acquisition of Hiku Brands to strengthen their retail and brand portfolio. “Leaves begin to turn. Canopy adds bold new brands. Ready for retail," commented Bruce Linton, Chairman & Co-CEO, Canopy Growth. "The Tweed and Vert brands we've built are now complemented with the likes of DOJA, Tokyo Smoke, Maitri, and Van der Pop, placing the taste-makers of tomorrow's cannabis industry on the same team."
In October 2018, Canopy announced the launch of a new brand for the recreational market in Canada; LBS. The LBS brand slogan - "Worth Its Weight In Gold" - is a reference to the care and quality put into the brand's products and also to its roots in California, the Golden State. Talking about the brand, Mark Zekulin, President & Co-CEO said, “Canopy Growth was founded to pursue a ‘house of brands’ strategy to be inclusive across multiple demographics and multiple cannabis markets.”
As for “ownership quality,” CGC is a high-risk limited reward play for the average investor. With a market cap of $16.7 billion and a book value of $5.22 on 232 million shares issued, Canopy Growth Corporation is more air than substance.