Canopy Entry Into U.S. 'Substantially Increases' Market, Says Canaccord

Canaccord Genuity analyst Matt Bottomley says Canopy Growth's hemp license in New York and its plans to expand in the state "substantially increases" the company's targeted total addressable market.

Hemp-based nutraceutical products, such as topicals, creams, oils, have a number of health and wellness applications that are not necessarily served by existing cannabis retailers, Bottomley told investors last night in a research note. With a New York license, Canopy is the first large-cap Canadian company to announce operations in the United States hemp market, which is estimated to reach a $3B annual revenue opportunity by 2021, says the analyst.

Further, he believes Canopy is "primed to potentially secure a meaningful share" of the U.S. hemp market given its "strong" balance sheet.

Bottomley keeps a Speculative Buy rating on Canopy Growth with a C$50 price target. The stock in morning trading is up 85c to $43.34.