CGC Stock Surges as Constellation Brands Lifts Its Stake (TSX:WEED) (NYSE:CGC)

When it comes to the cannabis industry, Canopy Growth (TSX:WEED) (NYSE:CGC) is one of the most important companies, and at this point, it is the biggest company in the industry in terms of market cap. in the pre-market session, CGC stock enjoyed a significant rally after it emerged that its biggest investors Constellation Brands (NYSE:STZ), exercised its rights to as many as 19 million warrants to acquire more stock in the company. The warrants in question had been issued back in 2017, and they were exercised for C$13 for each common share in Canopy Growth.

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It is a significant development for the company and helped it in raising as much as C$245 million. The latest transaction further strengthened the holds of Constellation Brands over the company and now gives it a stake of around 39% in Canopy Growth.

The option to exercise the warrants from Constellation was welcomed by the market as well, and on Monday, the Canopy Growth stock soared by as much as 8%. It should be noted that it has 140 million more warrants and principal notes worth C$200,000,000. If it exercises the rest of the warrants and converts its senior notes, Constellation could take its stake in Canopy to 55%.

Canopy Growth is one of those companies which have the potential of going into another growth trajectory by way of cannabis 2.0 products. These products have higher margins, and the company has already made a successful entry into the cannabis-infused beverages space. Canopy has developed cannabis-based water and fruit beverages already.

As a matter of fact, the company’s CEO stated that these products have also sold well thus far. Investors should also keep in mind that these products generate significant margins, and hence, Canopy is in a position to boost its growth significantly in the long run. It seems that investors could do well to keep a close eye on CGC stock at this point.

About Travis Garlick 1791 Articles
Been writing about and trading stocks since 2013. Manage a group of micro-cap investors on Facebook with over 15,000 members. Turned $8,500 into 185k the first year I started trading stocks and haven't looked back.