Canopy Growth Corporation (NYSE:CGC) is likely to continue generating strong top-line contribution from the medical cannabis market in Canada. Notably, the company operates 11 production facilities in Canada. It distributes marijuana across the country to patients in Canada, managing several medical conditions.
We expect this strength to reflect in second-quarter fiscal 2019 results, which are scheduled for release on Nov 14, before the market opens.
Click here to know how the company’s overall fiscal second-quarter performance is expected to be.
Solid Foothold in the Canadian Market
Similar to the last reported quarter; Canopy Growth is expected to gain from an expanding patient base in the Canadian medical cannabis market. Further, the launch of Spectrum Cannabis color-coded Soft-gels, which provide continuous and discrete dosing formats, is projected to boost the top line in the to-be-reported quarter.
Canopy Growth is also actively involved in creating its private cannabis retail channel in Canada in order to capture retail margin. In this regard, the company successfully invested in getting Tweed cannabis store licenses in provinces of Newfoundland, Labrador, Manitoba and Saskatchewan.
Canopy Growth Corporation Price and EPS Surprise
Among its recent developments, in the fiscal second quarter, the company launched a brand for the recreational market in Canada called LBS. It boasts a globally recognized family of brands, both in-house and built through partnerships as well as with icons in the cannabis space. LBS is the company’s latest addition to this lineup. While positioning itself as the gold standard in the cannabis industry, this brand should help accelerate sales in Canada. Moreover, this should get reflected in the company’s fiscal second-quarter numbers.
However, Canopy Growth has been actively gearing up to capture opportunities flowing in from the legalization of the recreational use of cannabis in Canada that started from Oct 17, 2018. The company has been conducting research, development and marketing activities, expanding production facilities, and submitting products for approval to Health Canada to prepare for this market. The increased expenditures to cash in on the new opportunity may put some pressure on the bottom line in the to-be-reported quarter.
Zacks Rank & Stocks to Consider
Canopy Growth currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Intuitive Surgical (NASDAQ:ISRG) , Stryker Corporation (NYSE:SYK) and Merit Medical Systems, Inc. (NASDAQ:MMSI) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Intuitive Surgical has an expected long-term earnings growth rate of 15.6%.
Stryker Corporation has a projected long-term earnings growth rate of 10%.
Merit Medical Systems has a projected long-term earnings growth rate of 13%.
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Intuitive Surgical, Inc. (ISRG): Free Stock Analysis Report
Stryker Corporation (SYK): Free Stock Analysis Report
Merit Medical Systems, Inc. (MMSI): Free Stock Analysis Report
Canopy Growth Corporation (CGC): Free Stock Analysis Report
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