Cannabis In Canada Is Soaring And So Should Canopy Growth
But there is growth on the way and I think that the company is poised to see additional revenue growth this quarter coming up. For example, and to highlight some of the potential, according to the company's teleconference, Canopy shipped 1.2M beverages during the first quarter of 2020 throughout the United States and Canada. This is a linear Run Rate of 4.8M beverages whereas last year the company sold a total of 4.2M beverages. But I have used a linear equation in this. Canada's sales continue to increase and likewise, the 4.8M Run Rate may be too low as the industry sees continued increases. Can it top 5M for the year? We will see, but that cannot be too far off. Keep in mind that Canada's revenues for total cannabis sales are up some 90% in the past three months. It is this revenue increase that I am drawing a potential link with the revenues of the key players in Canada, of which, Canopy Growth is the biggest player (rated in the top three throughout the country). Conclusion I am looking at the link between Canadian retail sales of cannabis and respective individual companies. It is a zero sum game. If Canadian retail sales increase and one company's sales numbers do not, the revenue increases must come from another company. With regards to Canopy Growth, it may not be the #1 producer in Canada, but it has the deepest pockets in the industry and is often the company most analysts in the industry look towards for a benchmark. My expectation is that the increased revenues in Canada will translate to increased revenues with Canopy and this may translate into much better revenue increases than expected. However, on last quarter's EPS, the company lost $0.19 per share. Hexo just released its revenues and earnings. That company saw increased revenues but missed big on its earnings with an expected $0.00 EPS but missed at -$0.30 EPS. So, just because Canopy may see increased revenues, I'm cautious that it necessarily will also see improved earnings. However, I am looking towards this as a potential opportunity. I am looking for the increased revenues and if earnings beat to the upside, I believe that Canopy will once again be a strong buy for a long-term investment. Otherwise, it may be a few quarters until the company prints growing earnings. https://www.google.com/amp/s/seekingalpha.com/amp/article/4385723-cannabis-in-canada-is-soaring-and-should-canopy-growth