– First of all let me say that my wife and I have subscribed to your
newsletter for years and are very happy with the advice that your team
provides. My question is about
Canopy Growth Corp. (TSX: WEED). I was wondering what your overall impression of this company is in terms
of investment. There has been a lot of hype in the news lately that has led
to an increase in the stock price but I am wondering if this is just hype
or does the company actually substantiate the increase. – Justin C.
– Canopy is a medicinal cannabis company, based in Smiths Falls, Ontario.
Its share price has increased by more than 360% in the past 12 months. The
company may have great growth potential if the federal government legalizes
marijuana, but it may be somewhat overhyped at present. Although the company’s
fiscal third-quarter financials (ended Dec. 31, 2016) showed a $3 million
profit on $9.8 million in revenue compared with a $3.3 million loss in the
year-ago period, inventory shortfalls have been a problem, recreational
marijuana has not yet been legalized, and share price has been volatile.
Market cap is about $2 billion, which is quite high for a company producing
about $10 million in quarterly revenue. All in all, it’s not a stock I
would recommend at this time. – Gordon Pape
is one of Canada’s best-known personal finance commentators and
investment experts. He is the publisher of
The Internet Wealth Builder and The Income Investornewsletter, which are available through the Building Wealth website.
The foregoing is for general information purposes only and is the opinion
of the writer. Securities mentioned carry risk of loss, and no guarantee of
performance is made or implied. This information is not intended to provide
specific personalized advice including, without limitation, investment,
financial, legal, accounting, or tax advice. Always seek advice from your
own financial advisor before making investment decisions.