Forget Everything You’ve Read About Cannabis: Canopy Growth Corp. Is Your Long-Term Investment

Marijuana companies across the Great White North have been enjoying steady top-line growth over the past few years. Special legislation was created, thanks to recognition of the plant’s medical benefits, to allow these organizations to circumvent the national ban on the substance. Today, more than 100,000 Canadians have obtained prescriptions to buy cannabis from licensed growers—a three-fold growth over the past year.

That said, the prize for the industry is not hermetically sealed. As part of Justin Trudeau’s outlined marijuana agenda, the plant will be nationally legalized come June 1, 2018. This has massive implications for all savvy investors with a hat in the cannabis ring.

Lifestyle becomes the name of the game

The overall sector’s growth is fueled by the retail consumer. The medical benefits are not to be ignored, but the lifestyle associated with consuming the product is the industry’s driving force. More than any other Canadian cannabis provider, Canopy Growth Corp. (TSX:WEED) has positioned itself to dominate retail.

Those who argue that the medically focused players can easily shift to retail are perhaps currently enjoying the product itself. The consumer is savvy and protective of their own personal brand. The value from the products’ association with medical benefits will completely change once new legislation passes.

With an open market, the marijuana industry will begin to resemble craft brewing rather than pharmaceuticals. The perception of the product is critical to driving revenue. After all, would you indulge in Johnson & Johnson’s new (and fictional) Jobin Double IPA? Developing a strong connection with the consumer is of the utmost importance and can be quite expensive. Ask any executive at a large beer manufacturer.

Canopy Growth Corp. has begun by spending on sales and marketing; its budget is more than double the combined expense of its two major competitors, Aurora Cannabis Inc. (TSXV:ACB) and Aphria Inc. (TSX:APH). This has already manifested in a larger social media following and tangential revenue from merchandise.

Tweed, it’s principle brand, has invested in cannabis content and periphery services. In addition, its partnership with Snoop Dogg should not be overlooked. His branded line, “Leafs By Snoop,” is a top seller in Colorado, where weed has already been legalized. Further, Snoop’s online media platform, MERRY JANE, boasts more than 100,000 followers. These digital channels are the foundation of a global distribution network, upon legalization.

Canopy Growth Corp.’s management deserves applause for a longer-term mindset in anticipation of a drastic market overhaul. The fundamental risk is a government reversal on national legalization. Although possible, Trudeau’s term is through 2019 and potential successor, Kevin O’Leary, has remained upbeat on the proposal.

For the savvy investor intrigued by the expansive opportunity in the marijuana space, Canopy Growth Corp. is the holding for long-term stock appreciation.

1 Massive Dividend Stock to Buy Today (7.8% Yield!) – The Dividend Giveaway

The Motley Fool Canada’s top dividend expert and lead adviser of Dividend Investor Canada, Bryan White, recently released a premium “buy report” on a dividend giant he thinks everyone should own. Not only that – but he’s created a must-have, exclusive report that outlines all the alarming traits of dividend stocks that are about to blow up – and how you can avoid them.

For this limited time only, we’re not only taking 57% off Dividend Investor Canada, but we’re offering you special access to two brand-new reports, free of charge upon signing up. They will outline everything you need to know so you steer clear of dividend burn-outs AND take advantage of the dividend giants in the Canadian market.

While this offer is still available, you can find out how to get a copy of these brand-new reports by simply clicking here.

Fool contributor Jared Shulman has no position in any stocks mentioned.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.