Canopy Growth Corp (WEED)

[PennyStockInvestor]

Market potential impressive, but TWD is currently overvalued

I broke down the current market in canada for medical marijuana>>>

40 000 legal users

assuming they use 1.5 oz a month (liberal estimate) they would consume as a whole 720 000 oz a year.

@ 7$ a gram = the entire market value $141 120 000 a year.

this is the total value of the legal marijuana market in Canada, 141 million dollars.

my issue>>>

here is my problem with the industry and Tweed's stock price.

they have 150 000 sq feet of space.

lets assume that they only utilize half of that for flowering. that's 75 000 sq feet for flowering.

they can take off crops every 8 weeks/ six times a year.

a good grow op should yield 1-2 oz per square foot.

lets say they yield 1.5 oz per square foot 6 times a year, that's a reasonable estimate.

that means with 75 000 sq feet would yield 675 000 oz a year.

(75 000 sq feet x 1.5 oz per square foot x 6 times a year)

that means that tweed alone could fill the of need for basically all 40 000 licensed patients in canada, as the market demand = 750 000 oz a year.

and this is only utilizing half their space!

Supply will far out pace demand. this concerns me, and should concern other prudent investors.

I should point out, we already know there are currently 11 other licensed commercial growers in Canada (not publically traded) and furthermore, those 40 000 patients will retain their right to grow according to supreme court ruling.

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here is my reasonable, but still liberal valuation for tweed.

lets say they capture 25% of the market (huge yes, but possible)

that means they will possibly service 10 000 patients a year that use average of 1.5 oz. a month and pay 7$ a gram.

10 000 patients x 18 oz a year (1.5 oz x 12 months) = 180 000 oz a year needed.

180 000 oz a year X 28 grams x $7 a gram = $35 280 000 revenue for tweed.

lets say over head is high @ 25%, profit =$26 460 000

but, the companies market cap is over 100 million already!!!

thats 4 times the projected value of their yearly earnings already!!!

and that my friends is still a very liberal estimate.

the reason i say supply is already outpacing demand, tweed is already advertising 5$ a gram, so there goes another approx 30% of their assumed profit mentioned above.

I used 7$ a gram.

how do others feel about the math???

please, tell me if you think i'mwrong and explain yourselves.

I think i'm relatively close here.

I personally would be a buyer of Tweed at about 60- 80 cents per share.