Having Burned Through the Constellation Investment, Canopy Growth Is at Risk for More Dilution

Canopy Growth grows and sells cannabis products primarily in Canada, which accounts for roughly 50% of sales. Unfortunately, the Canadian market is overloaded with too many licensed producers, leading to tough price competition and a stubbornly robust illicit market, so Canopy has yet to reach profitability. We forecast low-single-digit growth over the next decade for the Canadian market, driven by the conversion of illicit consumers into the legal market.