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The Canadian Cannabis Goliath

The beginning of Canopy Growth Corporation:

In response to several key changes to the Marijuana for Medical Purposes Regulations (MMPR)—particularly the phasing-out of home cultivation and easier access through medical prescriptions—one company, in particular, saw cannabis’ burgeoning potential before anyone else. The founders of Tweed recognized the opportunity to become a substantial licensed commercial operator in the Canadian marketplace, and became among Canada’s earliest cannabis entrants.

Its ticker symbol was TWD five year ago. The share price fluctuated around $3 for a year and then crashed to $1.10 by the fall of 2015. The Liberal victory in the federal elections saved the company as the market for legal cannabis was likely to increase by an order of magnitude in Canada alone.

Today, its share price fluctuates in the high 50s. Canopy went from a market capitalization of roughly $50 million to $20 billion in five years. Now, what matters is execution as they must go from an annualized revenue of $333 million to $2 billion to justify their sky-high valuation. As America and Europe slowly but surely go towards legalization, it's possible that Canopy just might hit a $200 billion valuation by the end of the 2020s. That would imply a share price of approximately $360 then.

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