Canopy Growth Corp (WEED)

[hammerod]

Okay so the 7 millions grams projected by the company for 2015 does not have to translate into sales.
But why would it not?

The fact is that Tweed plans on growing 7 million grams in 2015. That would be without any extra grow rooms built. That is with all grow rooms at capacity at the end of this year producing as per their guidance.

Now if they add more grow rooms at both facilities because of demand, well then that is a whole different story. For the sake of speculation, let's assume that they grow 7 million grams in 2015
but there is only demand for half! (I doubt it and if the GOVT. overturns the injunction sales could be in TWEEDS favor.) But for the sake of my argument here, let's say only half of the 7 million grams get purchased.

3.5 million grams at 7 per gram (average selling price per gram from the earning's release) That equals $24.5 Million in gross sales. Factoring in the predicted 70% profit margin that equates to $17,150,000 in net revenue.

Now put a multiple of 20 ( crazy in a new growing industry, some tech stocks are trading at 80 times earnings) but let's assume a conservative multiple. 20 X 17.15 million = $343 Million.

That puts Tweed at a Market cap of $343 million. Divide that by the 40 million share outstanding and you get a share price of $8.57 per share. It seems as though the market trades about a year ahead of future earning.

If that is true in Tweed's case, and as the next few months unfold as predicted by the company. As well as the additions of more metrics that will come into the light, and without any production increases or acquisitions, TWEED SHOULD be at at least over 8 per share by the first of January.

If Oregon and Alaska and especially Washington DC goes recreational with the November elections,
then the MMJ world will go completely crazy again and that 17 price will start to look more obtainable!

Read this: DC going rec will force the Federal GOVT. into making big changes. ALL IMHO!

http://wallstcheatsheet.com/politics/5-states-and-one-city-ready-to-legalize-marijuana.html/