Canopy Growth (NYSE:CGC) is still the “best way” to play the Canadian cannabis market, said Jim Cramer, the much-followed stock-picker and host of CNBC’s “Mad Money”.
Cramer remains more bullish on Canopy Growth than on the Canadian cannabis company Cronos Group Inc (NASDAQ:CRON), the recent beneficiary of a $1.8 billion investment by the tobacco behemoth Altria Group (NYSE:MO).
“Even with Altria investing in Cronos, I believe that Canopy Growth remains the best way to play the Canadian cannabis market,” Cramer said, per a CNBC report.
The benefits Canopy Growth holds over Cronos are scale and the fresh injection of a $4 billion investment by beverage giant Constellation Brands Inc (NYSE"STZ), maker of Corona beer.
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“Can Cronos compare to Canopy Growth? Honestly, it isn’t really a fair comparison,” Cramer said. “Canopy’s significantly larger than Cronos — we’re talking about an $11.4 billion company versus a $2.3 billion company. Canopy’s got scale and scale matters in this business.”
Canopy has a bigger repertoire of cannabis products than Cronos and also maintains its lead against its rival in medical marijuana. Canopy delivered almost 2,200 kilograms of medical cannabis, which was equal to about $23.3 million in sales last quarter, according to CNBC’s findings. Cronos, meanwhile, shipped 515 kilograms, which amounts to about $3.8 million in sales.
Constellation Brands also looks to be a better investor over the long run than Altria, which is finding it tough to widen its business beyond tobacco, said Cramer.
“To me, it seems like Constellation took its time [and] thoughtfully picked the best player to invest in, whereas Altria’s move feels a little rushed, maybe even intemperate and impulsive,” Cramer said. “When I say Canopy has a head-start, we’re talking about a big lead over the competition.”
Canopy Growth shares nudged up 0.42% to $33.31 in Wednesday’s morning trading session while Cronos shares slipped by 0.86% to $12.71.
Contact Ellen Kelleher at ellen@proactiveinvestors.com