Stockchase Opinions

Jim Cramer - Mad Money Canopy Growth CGC-N WEAK BUY Oct 20, 2020

Investors are betting on the Blue Wave, a Democratic sweep. Though Biden hasn't said he'll legalize cannabis, the Dems will make it easier for the cannabis industry to operate. Of note, recreational grass is already legal in 11 states and DC; recreational weed is on the ballot in three states on Nov. 3; and two-thirds of American believe it should be legal, even more when it comes to medicinal grass. No, we won't see a boom in Canadian weed, but instead American companies because American politicians need to serve American businesses first. Canada teaches us that when you legalize weed, EVERYBODY grows it, supply surges, driving the price down and companies don't make money. The one exception is Canopy. One reason is its relationship with Constellation Brands and carries the potential of weed-infused drinks and a leg up against competitors. Canopy itself has been a dog, but is lately showing some life.

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COMMENT
Lots of excitement here with the Democrats in the White House and wanting to decriminalizing cannabis, but Canopy needs full decriminalizing if it will keep going higher. Eventually, we'll get there, but likely not fast enough for the bulls. It reports Tuesday.
DON'T BUY
We need federal legalization now; he can't embrace the weed group until that legislation. He'd rather hedge in this space by buying Constellation Brands.
DON'T BUY
He prefers Constellation Brand, an integrated weed company.
DON'T BUY
The core business isn't that good. It's too late to sell, but don't buy any shares now.
DON'T BUY
At $9, you could buy it, but this had a weak quarter. Run by a good CEO and Constellation Brands has a stake in it. Problem is, he doesn't like the cannabis business--it's overhyped like gambling now.
DON'T BUY
Isn't recommending any cannabis stock, which need federal government approval of weed to rise.
DON'T BUY
Until Washington legalizes weed, you can't own this stock.
COMMENT
Will Constellation drop Canopy? No. The CEO believes that one day cannabis will be legalized nationally. He agrees, but doesn't know when this will happen.
BUY

Has followed this for along time. Constellation Brands owns a large stake in this. Shares are up 135% in the past month, though gave back in recent session. It's still more than doubled since he heard of possible legalization of weed in the U.S. Pres. Biden mentioned full legalization on March 7 and just today Florida said it will place the legalization question on the ballot.

BUY

Florida's upcoming vote to legalize cannabis could impact the industry. Canopy is the go-to name,