Canopy Growth Carves Out Major Presence In Ontario Cannabis Market

Canopy Growth Carves Out Major Presence In Ontario Cannabis Market
Canopy Growth Carves Out Major Presence In Ontario Cannabis Market

Ontario’s cannabis market has been the biggest disappointment for the Canadian cannabis industry for one reason: lack of cannabis retail stores. With a population of roughly 14.5 million, it is Canada’s most populous province. But to date, the provincial government only has 25 licensed cannabis stores in operation.

The second “lottery” for cannabis store licenses in Ontario was conducted in the fall of 2019, with roughly 30 new lottery winners progressing through Ontario’s cannabis licensing process.

Canopy Growth (US:CGC / CAN:WEED), Canada’s largest cannabis company was largely shut out of the first round of store licensing, despite being based in Ontario. The Company is ensuring that this won’t happen with this second round of licensing.

On January 6, 2020; Canopy Growth announced that it is “working with” a total of 10 license holders to open Tokyo Smoke branded retail stores, Canopy’s retail brand. This includes the five licensees that were previously announced by the Company on November 28, 2019.

Rade Kovacevic, Canopy Growth’s President, addressed this important news.
 
“With ten new stores set to open in the first half of this year, we are pleased with the momentum we've built and excited to bring the Tokyo Smoke experience to more Ontarians. Increasing Tokyo Smoke's presence across the province will expand access to high-quality cannabis products and education, continuing to migrate cannabis sales from the illicit to the regulated market.”

These 10 licensees are all progressing to the next stage of the licensing process.

This will increase Canopy’s total retail footprint in Canada to 37 stores. More importantly, once opened these new locations will establish Canopy as Canada’s largest cannabis retailer in Canada’s largest province – and its own base of operations.

Since bottoming November 18, 2019 at $13.81, CGC is up over 40%, boosted by a “buy” recommendation from Bank of America Merrill Lynch.

Canopy is also expected to be one of the big winners as Cannabis 2.0 rolls out across Canada. With a full line of infused beverages and edible cannabis products, the Company looks to be on track for a much stronger operational performance in 2020.
 
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