Post by
geodcan on Aug 16, 2023 3:46pm
BioSteel deal
just reinforces my take that even the "professionals", accountants, lawyers and hardcore businesspeople have trouble understanding each other.
The previous link I posted is pages long and more complicated than I can comprehend, which I guess is essential to pull off a deal like the principals of this company are doing to turn it in to a conglomerate.
I do feel that their could be protectionist influence from the US as Canopy is identified as a Canadian LP but keep in mind that it's largest shareholder is Constellation Brands STZ that took the wheel to complete the deal that was struck when Bruce Linton was involved.
Anybody invested in this really needs to open the link to get a grasp of what is going on behind the scenes and determine the objective of this investment.
I was always interested in the potential of the cannabinoid business and fortunate enough to pick a few winners, back in the good old days.
Those days had a major head on collision with reality as did Constellation Brands who were smart enough to force the hands to re-do the deals that they had already inked.
The re-visit to the Canopy Acreage deal proved to me that a deal isn't a deal when you deal with smart operators that left themselves a wayout which they reworked in to another deal because Acreage was on the ropes.
Constellation had the courage of their conviction to stay the course with the cannabinoid business and made their presence known with at least a half dozen other cannabinoid companies but did it at firesale prices.
I believe they saw the writing on the wall for their light alcohol business with cannabinoid infused beverages about to be the new consumer choice and did what smart progressive moneymaking companies do which is to see the future and move towards it.
Somewhere along the way they recognized that the cannabinoid business was more than beverages and embraced brands with potential to make profits.
That plan is to become the sum of the parts and become Canopy USA, LLC to sell their brands in the US market as a US MSO.
Doing this is complicated beyond comprehension but STZ management thinks they can do this and have announced that they aren't waiting for the US to clear the obstacles to International players.
In the meantime they have almost stopped the cash drain in Canada with their asset -light model and have done branding deals with their chosen companies in the US that are destined to become one.
STZ spread their influence to set up Acreage for the merger they have inked and cleared out some of the blood sucker hanger-on-ers because that is a businessplan too, to get rid of the duplication of labour and management to get that expense into the black side of the balance sheet.
Why is it taking so long! Read the link I posted and it becomes self-explanatory.
https://www.canopygrowth.com/wp-content/uploads/2023/02/CGC-Q3-FY2023-MDA-FINAL.pdf
Lots of investors are recognizing the upside potential amidst the confusion. I beleive that STZ will cover any shortfalls if needed to bring this home. I don't see them walking away from their $5 to $10 billion investment in to their choices to be a part of the US greenrush. They are still recognizing deals and moving on them which doesn't seem like quitting.
glta and dyodd
Comment by
quinlash on Aug 16, 2023 6:52pm
If it wasn't going to be good for the company and for it's investors then management would not be doing it, simple as that imho