Early today, Canopy Growth (WEED) (CGC) announced it had acquired Spanish company Cafina, through which Canopy intends to establish a broader reach in the European medical market. Cafina is also focused on hemp, which could help if European markets follow US markets and warm up to hemp farming. In a press release, Canopy Growth stated that “Cafina CEO, Xavier Delas Martinez will continue managing the site as Canopy Growth injects capital in order to scale the operation through calendar 2019.”
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Supply constraints are among the biggest issues facing Canadian cannabis markets. It appears that Canopy Growth is cautious of things going the same way in Europe and acting so that it has enough supply to capitalize on market opportunities. Canopy president and co-CEO Mark Zekulin said, “Operating multiple production assets within Europe will allow us to increase revenue in the EU free of supply constraints.”
With this development, Canopy Growth stock rose this morning. As of 10:20 AM Eastern Time, Canopy had risen 4.5%, while peers (HMMJ) Tilray (TLRY), Cronos Group (CRON), and Aurora Cannabis (ACB) had risen 2.8%, 2.5%, and 2.6%, respectively.