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Why GMP Securities Is Bullish on Canopy Growth

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Mar. 26 2018, Published 8:09 a.m. ET

GMP Securities on Canopy Growth

Last week, GMP Securities analyst Martin Landry maintained a “buy” recommendation on the stock with a price target of 40 Canadian dollars. In our recent series, What Analysts Recommend for Cannabis Stocks in March, we looked at recommendations and price targets of cannabis stocks (HMMJ) such as Canopy Growth (WEED), Aurora Cannabis (ACB), MedReleaf (MEDFF), and Cronos (CRON). In that report, we saw that analysts’ consensus mean price target for Canopy Growth was 33.6 Canadian dollars. GMP’s higher price target is more bullish than the analyst consensus mean target price.

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Why the optimism?

The optimism appears to be coming from the GMP analyst’s recent visit to Canopy Growth’s facility in Aldergrove. According to the analyst, the facility expansion remains on target and is slated to produce over 150 tons of product by the summer of 2018.

Canopy Growth is expected to have the largest space in terms of square feet. In the above chart, we see that the company’s capacity is expected to reach about 5.6 million by next year, positioning the company aggressively in the market. Landry assumes a 25% market share for Canopy Growth in the Canadian recreational cannabis market.

To read more about cannabis companies’ facility expansion projects, read How Cannabis Companies Are Rushing to Expand Operations.

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