Can Canopy Growth Stock Regain Its Heights?

CGC Stock’s Future Looks Bright

One of the best stocks I’ve written about in my entire career is Canopy Growth Corp (NYSE:CGC). When I first wrote about Canopy Growth stock back in late 2016, it was trading around $8.00 per share. Within three years, it had risen by more than 600%, hitting highs of more than $48.00.

But since reaching those highs, CGC stock has had a more up-and-down progression.

Can we expect Canopy Growth stock to hit those highs once more? Yes, it absolutely can (and I believe it will) not only reach its former heights, but exceed them.

But before I delve into that, I’ll recap what has happened to CGC stock over the past few years.

Canopy Growth Corp entered the scene under the leadership of Bruce Linton, who was a founder and the CEO. Linton became something of a face of the marijuana industry. That helped propel the company to the head of the industry, which led to the massive share-price growth.

Combining Linton’s prominence and borderline celebrity status with the company’s ravenous approach to acquiring smaller competitors, it seemed like Canopy Growth Corp would be the industry standard-bearer.

And it was for a while.

But then, Canopy Growth Corp started to see some stronger competition. Soon, it wasn’t the only household name among pot companies (at least to retail investors).

Finally, Canadian marijuana legalization went from being a future scenario to a reality. I won’t go over all the issues with the rollout of Canadian marijuana legalization, but there were many deficiencies that led to lower-than-expected sales and slower-than-expected growth.

That underperformance, combined with the massive hype that was building around the industry in the lead-up to Canadian legalization, led to a prolonged correction in the pot stock market.

That correction was by no means permanent; we saw many ups and downs during that time. There were still gains to be made, but the seemingly unending upward trend was finally interrupted. Since then, Canopy Growth stock has had a more uneven performance.

Courtesy of StockCharts.com

The year 2019 represented a long and slow descent as the Canadian marijuana market underperformed. These losses were spread across the industry, and CGC stock was by no means unique.

I was still long on Canopy Growth stock back then, as the company had a large production capacity and a prominent position in a developing and improving Canadian market.

Not to mention that Canopy Growth Corp expanded into foreign markets, something that I believed (and continue to believe) was a great way to profit from the pot industry’s growth.

And Canopy Growth still had its partnership with Constellation Brands, Inc. (NYSE:STZ). Partnering with one of the top alcohol producers in the world was a huge victory for Canopy Growth Corp. This was an especially savvy deal, considering that the pot industry was looking at cannabis-infused beverages as the next big thing.

But as the price of CGC stock descended in 2019, Linton was fired. His firing was reportedly the result of Constellation Brands (leveraging its board positions) wanting to remove Linton due to his focus on growth and expansion. Constellation Brands, Inc. wanted to see profits.

I sided with Linton in that dispute, as you might expect. And I was concerned then that Canopy Growth Corp would lose out on the huge potential of the marijuana industry as it focused on profiting from the relatively measly existing legal pot market.

After all, in a few years, we could see the marijuana industry grow exponentially as more countries legalize the drug.

And I still have some skepticism about Canopy Growth Corp’s current direction. Having said that, I do believe that Canopy Growth stock can regain its former heights.

The first reason I remain bullish on CGC stock is the company’s foundations. Canopy Growth has a huge production capacity, footholds in countries around the globe, and the ability to enter the U.S. market through its right to acquire Acreage Holdings Inc (CNSX:ACRG.A.U, OTCMKTS:ACRHF) when America federally legalizes marijuana.

The second reason I remain bullish on Canopy Growth stock is the company’s partnership with Constellation Brands, Inc. While I may not be the biggest fan of the direction it’s steering Canopy Growth Corp in, it still has a lot of capital and influence that it can use to aid CGC stock’s future growth—as well as provide staying power through downturns.

The third reason I’m still convinced that Canopy Growth stock is bound to regain its $48.00 high—and even surpass it—is that the marijuana stock market is growing faster than ever.

After a huge dip that resulted from the COVID-19 pandemic, pot stocks have been rebounding nicely. While the rally has been somewhat derailed, given the improving Canadian marijuana market and other opportunities spanning the globe, I like the chances of the dominant pot stock rising well past its former glories.

At its current price of $23.28, I believe CGC stock investors could double their money in the next few years.

Analyst Take

While I don’t believe another 600% gain is in store for Canopy Growth stock anytime soon, as I explained earlier, I’m still very bullish on the company.

CGC stock absolutely has the potential to see 100%-plus gains in the next few years. I believe that, as it stands now, Canopy Growth Corp represents a great investment opportunity for patient buy-and-hold bulls.