Quote:
Originally Posted by MrRoboto
I don't think it's late to join in at all. The medical market has some fairly solid forecasts but the recreational market is a complete unknown.
By the way Canopy was just listed in NY last week.
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Wonderful, why do I care? It has been listed on the TSX now since July 2016. Just because it is on NY, doesn't mean savvy US investors will say, "Oh, hey, there's an overvalued stock I can now buy, I want a piece of it too - let's push up the price".
No, to me the NYSE listing doesn't change much - just broadens the market. But the underlying fundamentals don't change. And that is - is there an opportunity that this company has the ability to take advantage of and drive value, such that there is future growth in this stock.
Canopy's market cap right now is $7.4 BILLION. And that is just ONE grower.
Contrast that with estimates as to how big the recreational market is - Deloitte estimates somewhere around $8.7B, but could be significantly higher with security services thrown in, and the fact that more might try it, but these are of course estimates.
And then you have Statistics Canada estimating that Canadians spent only $5.7B in 2017 on weed.
I'm sorry, but I don't see it. One grower's market cap exceeds Stat Can's estimates for the entire population, and they are going to grow a lot more?
Further, its not like everyone is going to switch to legal sources either - sometimes because Canada is rural, and there likely won't be a legal shop in all communities, so reduce the market for all these areas. Then factor in the fact that everyone who gets a license will be contributing to a race to the bottom where they will overproduce to try to get as much market as possible, but that is just going to oversupply, which drops prices. And drops profit.
I think you really need to think this all the way through. At best, a gamble.