Ontario-based global cannabis producer Canopy Growth Corp. (TSX: WEED) (OTC: TWMJF) has received a cultivation license for the first of its two British Columbia production sites operating under the BC Tweed Joint Venture. The initial licensing covers over 9 acres of growing space at its Aldergrove, BC site. As plants mature, they will be spread over the full 30 acres for flowering and harvest. The site received over 100,000 cannabis clones over the weekend from Tweed’s Ontario campus.
The stock traded up on the news yesterday, reaching CAD $23.67 in midday trading. The company’s market cap is roughly CAD $5 billion. It trades at 80 times sales, with over $50 million in sales over the past 12 months. It does not yet report a profit.
Canopy, and all Canadian cannabis producers, are racing to be ready to supply large volumes of cannabis this summer to meet heightened demand when Canada is expected to legalize adult recreational cannabis sales and use across the country. Producers who supply the most cannabis when the markets open believe they will have an advantage holding market share going forward. Canopy, with its affiliates, is currently the largest producer of cannabis, now sold for medical purposes, and is expected to be the largest producer when the recreational sales gates open. But other producers, such as Aurora Cannabis, will have large production capacity in Canada coming on board soon after. Canopy is not building capacity in the USA, and will not until the US federally legalizes cannabis.
BC Tweed Joint Venture is a collaboration between Canopy Growth and Tweed, an established British Columbia greenhouse cannabis grower and brand, to develop up to 69 acres of automated greenhouse production space on two large sites in British Columbia.
The Aldergrove BC site is the largest federally licensed cannabis site in the world. It was approved relatively quickly, showing professional execution by the company. With the Aldergrove site producing, BC Tweed will focus on finishing its second BC site, a 39-acre greenhouse. Canopy Growth will eventually have over 128 acres of domestic growing space.
Canopy is a diversified, global cannabis and hemp company, offering brands and varieties in dried, oil and Softgel capsule forms. “A cultivation license for our first BC Tweed site positions us to continue…as the world’s largest, most reliable and most diversified producer and seller of high quality regulated cannabis,” said Mark Zekulin, President, Canopy Growth.
Tweed is a known cannabis brand grown in British Columbia. “Working with Canopy Growth, we’re going to take the Tweed brand to the next level on the West Coast and bring the best our province has to offer to the country and the world,” said Victor Krahn, who runs operations for BC Tweed.