![]() ![]() The best way to look at Canopy Growth stock and the marijuana industry as a whole is to think big - just as Linton is doing.ģ Stocks That Are Absurdly Cheap Right Nowĥ Warren Buffett Principles to Remember in a Volatile Stock Market Even if the global marijuana market doesn't grow nearly as much as Constellation thinks it will, or if Canopy doesn't capture as great of a market share as projected, this marijuana stock still could have a lot of room to run. The most important takeaway from all of this isn't whether Canopy Growth is eventually a larger business than Constellation. Sure, there are plenty of assumptions that might not pan out and prevent his goal from becoming a reality. In the final analysis, though, I think we can conclude that Linton isn't making a crazy prediction about Canopy Growth's ability to become larger than Constellation Brands. Even a slightly better growth rate could make a big difference in whether Canopy can catch up with and pass Constellation. There's also a real possibility that Constellation Brands could grow revenue more than just 8% each year. There's no guarantee that Canopy will be able to exceed the midpoint of the range. That's undoubtedly why Constellation used such a wide range. The global market-share projections for Canopy Growth are also pretty much educated guesses. market, Canopy's chances of topping Constellation in size are smaller than the odds that the recent Super Bowl halftime performance wins an Emmy - slim to none. That seems more likely to happen than in the past, but it's definitely not a slam dunk. Constellation's projections could be horribly wrong.Ĭonstellation's projected marijuana market sizes count on the U.S. It won't be easy, but there's a decent chance that Linton's view that Canopy could be larger and more successful than Constellation in the future just might be on target. Unfortunately, hitting the midpoint of that range won't be enough for Canopy to grow larger than Constellation unless the global marijuana market expands more quickly than expected.īut Canopy doesn't have to beat the midpoint of Constellation's projected market share range by very much to be on track to top its partner's annual revenue. The big challenge for Canopy Growth in becoming larger than Constellation Brands is to succeed in the rest of the world.Ĭonstellation estimates that Canopy can pull in a market share between 5% and 15%. However, Canada's addressable marijuana market is projected to be around $11 billion within the next 15 years. That seems quite possible, considering Canopy's production capacity and solid supply agreements with all of Canada's provinces. The alcoholic-beverage company thinks Canopy will grab between 30% and 40% of the Canadian marijuana market. For Canopy Growth to be larger than Constellation by that point, the marijuana producer would need to capture nearly 11% of the global market.Ĭonstellation did its own number-crunching before it ponied up $4 billion to increase its stake in Canopy Growth. And 15 years from now, the company would make more than $25 billion annually.Ĭonstellation itself thinks the global cannabis market will reach a little over $230 billion over the next 15 years. ![]() If we went out 10 years using that same growth rate, Constellation's revenue would total more than $17 billion. If we use a CAGR of 8% and project it out five years, the company's revenue would be close to $11.75 billion. Still, though, Constellation expects to increase sales over the next several years by mid- to high single digits annually. The company's wine and spirits business weighed on overall performance in the third quarter and could continue to do so. However, Constellation's growth will probably slow down somewhat in the future. Over the past five years, the Corona beer maker has increased its revenue by a compound annual growth rate (CAGR) of 12%. Remember that Constellation should grow, too. What it would takeįor Canopy Growth, it's not quite as simple as increasing its annual revenue to more than $8 billion to become larger than Constellation Brands. Young man with a drawing of a rocket with a dollar sign on his back ![]()
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