Recently, President Joe Biden pardoned those with convictions for federal possession of marijuana and pushed for the drug's removal from Schedule 1.
Thanks to Canopy Growth Corporation's (CGC) continued to focus on growing its product selection, medicinal cannabis sales in Canada climbed by 8% over Q2 FY2022. Adult-use sales in Canada stabilized compared to the previous quarter, while significant brands including Doja, Tweed, and Deep Space saw rises in market share. The company saw net sales increase by 7% in Q2 FY2023 compared to Q1 FY2023, despite the continuing effects of macroeconomic headwinds and shifting Canadian cannabis market dynamics. Additionally, they were able to increase BioSteel's net revenue by 290% over the prior year thanks to increased investment. After the quarter was through, a production facility was purchased, which is expected to aid the brand's ongoing quick expansion in the United States and drive up gross margin. In 2019, Canopy Growth (CGC) acquired a controlling stake in the company. The objective was to create a strategic partnership to jointly develop CBD products.
"In Q2, we generated net revenue of 180 million, representing a 10% decline over the prior-year period. When adjusting for both the impact of C3 and the impacts of our Canadian retail business, which we are divesting, revenues increased 2%. Sequentially, net revenues increased 7% compared to Q1. "
Walmart, Rite Aid, Winn Dixie, and other retailers are among those with which BioSteel currently has distribution agreements for FY2023. Drinks manufactured of BioSteel increased from 6.5% in Q2 FY2022 to 34% All Commodity Volume (ACV)5 in the United States. BioSteel signed a multi-year contract with the National Hockey League and the National Hockey League Players Association to serve as the Official Hydration Partner. Through this relationship, BioSteel will gain access to retail activation rights, league-wide rink-side marketing, and product supply rights, as well as a platform for community involvement.
Legal Complications & Opportunities
Right before the dramatic rise in November, the company announced they are consolidating its US assets Acreage Holdings, Wana Brands, and Jetty into a new holding company called Canopy USA. Wana Brands specializes in marijuana edibles, while Jetty specializes in marijuana extracts. Acreage Holdings has a portfolio of cannabis cultivation, processing, and dispensing operations across the United States where marijuana consumption is legal. This action is anticipated to assist the company lower expenses and gaining access to the U.S. market, which is anticipated to be worth more than $50 billion by 2026.
There are some technical issues with these acquisitions. Its intended formation of a Canopy USA holding company might result in the delisting of its shares on Nasdaq. This is because cannabis businesses operating primarily in the United States are not allowed to list on American stock exchanges.
With cannabis stocks, the marijuana market is not fully legal across all 50 states which is a major problem for this market. Alternatively, only a select number of states have legalized the historically controversial plant. A growing number of voters are pushing their representatives to legalize or regulate marijuana. Currently, marijuana is included by federal law in Schedule I of the Controlled Substances Act, which is reserved for the most dangerous drugs like heroin or methamphetamine. That being said, government officials are slowly moving toward the path of legalization.
The U.S. Department of Justice and HHS were tasked on October 6th by President Joe Biden to "examine promptly how marijuana is scheduled under federal law." At the end of October, Chuck Schumer, the majority leader in the Senate, stated that the Senate was extremely near to passing legislation granting access to the American banking system for cannabis firms. Access to the American banking system is a very big deal. Marijuana is presently legal in 21 states of the United States, adding a blue state plus a red state beginning in the November 2022 midterms elections. Voters in North Dakota, South Dakota, and Arkansas rejected initiatives to legalize marijuana for adult use. These three states are among the conservative strongholds in the United States. Initiatives for legalization were approved by voters in Maryland and Missouri.
In the company's own local jurisdiction, the Canadian government initiated a legislative review in September of the 2018 Cannabis Act, which legalized the sale of marijuana in the country.
AI Trading
The publicly forecasted November 3rd, 2022 forecast, identified Canopy Growth Corporation (CGC) as the number 1 stock pick in the 1-month time frame generating a significant 36.67% return. The main advantage of adopting AI for stock market research is that it can objectively and continually examine more assets at all times of the day. By combining big data analytics with our AI prediction system, we can improve decision-making, outcome modeling and forecasting, and market information.
The AI trading system analyzes empirical data of financial market irregularities linked to trader overreaction and underreaction to generate daily projections in six different time frames. Every day our subscribers receive the best stock picks selected by the AI systems algorithms for that day, that week, the biweekly outlook, month, quarter, and annual outlook from that date every single day of the (business) week that the markets are open.
Below is the number 1 stock prediction from our monthly forecast that we published publicly on November 3rd, 2022 to our subscribers getting exclusive market insights based on artificial intelligence.
Click here to see the original forecast published on November 3rd, 2022.
Based on the historical accuracy of each previous financial stock prediction in conjunction with current market circumstances, the AI system calculates the Signal Confidence (SC), which is expressed as a percentage out of 100%. The Signal Confidence (SC) in this stock forecast is 61%, indicating that the AI system has determined that this stock signal is very strong. When combined with machine learning, these incredibly intricate mathematical functions for statistical programming and modeling are capable of comparing their current coefficients and algorithms to newly added data and then adapting to improve the models' accuracy through a process of validation and reflection.
Stock Ticker | Open: Nov 3, 2022 | Close: Dec 2, 2022 | ROI% |
Canopy Growth Corporation (CGC) | $3.16 | $4.29 | 35.76% |
Subscribers who purchased our top stock prediction for the November 3rd, 2022 monthly forecast would have profited 35.76%, or $1.13 per share, on this single one-month position. When analyzing the market, use caution at all times. Prior to implementing any financial plans, you should always conduct your own due diligence and seek advice from a licensed and certified financial adviser.
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Sources: 1. PR Newswire, "Canopy Growth Corporation Reports Second Quarter Fiscal Year 2023 Financial Results" (2022)
2. The Motley Fool, "Canopy Growth Corp. (CGC) Q2 2023 Earnings Call Transcript" (2022)
3. Constellation Brands Press Release, "CONSTELLATION BRANDS ANNOUNCES PLAN TO CONVERT COMMON STOCK HOLDING IN CANOPY GROWTH" (2022)
4. White House Briefing Room, "Statement from President Biden on Marijuana Reform" (2022)
5. Yahoo Finance, "Cannabis stocks rise amid Senator Schumer's confidence in passing legislation" (2022)
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