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Value Investors: Buy the Top Canadian Consumer Medicals Stock

Powder of Cannabis (Drugs), Analysis of Cannabis in laboratory.
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Canopy Growth (TSX:WEED)(NYSE:CGC) sells medical products and operates in two reportable segments. The company’s global cannabis segment encompasses the production, distribution, and sale of a diverse range of cannabis and cannabinoid-based consumer products in Canada and internationally.

Lucrative and high-margin division

The company’s consumer products segments is a lucrative and high-margin division for the company. This division is comprised of the production, distribution, and sale of consumer products by Storz & Bickel, This Works, and BioSteel, and other revenue sources.

Blending with hemp-derived cannabidiol

In addition, other product offerings which are sold by Canopy Growth’s subsidiaries in jurisdictions where it is permissible to do so, include Storz & Bickel vaporizers and This Works beauty, skincare, wellness, and sleep products. Some of these products have been blended with hemp-derived cannabidiol (CBD) isolate.

Wide variety of product offerings

Further, Canopy Growth also sells BioSteel sports nutrition beverages, mixes, protein, gum, and mints, some of which have been infused with hemp-derived CBD isolate. The company’s products contain tetrahydrocannabinol (THC), CBD, or a combination of these two cannabinoids, which are found in the cannabis sativa plant species.

Marijuana-based products that could appeal to the masses

THC is the primary psychoactive or intoxicating cannabinoid found in cannabis. Canopy Growth also uses hemp in the company’s products, which is a term used to classify varieties of the cannabis sativa plant that contain CBD and 0.3% or less THC content by dry weight. Also, Canopy Growth sells marijuana-based products, which refers to varieties of the cannabis sativa plant with more than 0.3% THC content and moderate levels of CBD.

Well-maintained and licensed operational capacity

In addition, Canopy Growth’s licensed operational capacity in Canada includes indoor and greenhouse cultivation space, post-harvest processing and cannabinoid extraction capability, advanced manufacturing capability for vape products, soft-gel encapsulation and pre-rolled joints, a beverage production facility, and confectionary manufacturing.

Significant capabilities that allow Canopy Growth to supply the recreational and medical markets

These capabilities allow Canopy Growth to supply the recreational and medical markets with a complementary balance of flower products and extracted cannabinoid input for the company’s oil, CBD, ingestible cannabis, cannabis extracts, and cannabis topical products.

Implementing various measures to reduce the spread of the virus

Management has continued to closely monitor the impact of the COVID-19 global pandemic, with a focus on the health and safety of Canopy Growth’s employees, business continuity and supporting the company’s communities. Canopy Growth established a COVID-19 management committee shortly after the declaration of COVID-19 as a global pandemic and implemented various measures to reduce the spread of the virus.

Experienced minimal disruption to the production and supply chain

Furthermore, Canopy Growth has continued to operate under preventative measures and has experienced minimal disruption to the company’s production and supply chain. All 34 of Canopy Growth’s corporate-owned retail stores are open and offering click-and-collect and in-store shopping.

Resilient business model

Overall, Canopy Growth’s resilience has been admirable. The company’s business model is strong, and it could continue to deliver high-growth for the foreseeable future, which should benefit retail investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Nikhil Kumar has no position in any of the stocks mentioned. 

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