Canopy Growth has a significant opportunity in Germany, says Canaccord Genuity

Canopy Growth Corp. (TSX:WEED) has a real chance to make a splash in the nascent German marijuana market, says Canaccord Genuity analyst Neil Maruoka.

This morning, Canopy Growth issued an update, part of which was dedicated to the company’s efforts in Germany. The company will rename its German subsidiary Spektrum Cannabis Germany GmbH an said it will continue sales of Tweed branded varities it said are “accelerating rapidly”. Canopy also highlighted a logistical milestone.

“The company is honoured to announce that following an inspection by German authorities, both the Tweed Smiths Falls facility and the Tweed Farms facility have received certificates of good manufacturing practices (GMP) as issued by Regierungsprasidium Tubingen,” said CEO Bruce Linton in a press release. “A GMP certification is given to companies who demonstrate a high degree of precision and consistency in their manufacturing procedures. This validates the work Tweed’s team has accomplished and bodes well for continued exports to Germany and other highly regulated jurisdiction.”

Maruoka says the German market may start small, but it represents a significant long term opportunity for Canopy.

“Although cannabis export volumes are likely modest, we believe there is a significantly larger growth opportunity in the longer term, particularly with a German cultivation license,” says the analyst. “Receiving GMP certification from the German regulators, we believe Canopy should remain well positioned to continue exporting cannabis into Germany. And, although the German medical cannabis market is in its infancy, we believe this could be one of the most attractive emerging global opportunities for cultivators. The German government has recently begun the tender process for growing licenses, and we expect Canopy has participated in this process in order to remain a key player as this market shifts away from importation and towards domestically grown product.”

In a research update to clients today, Maruoka maintained his “Hold” rating and one-year price target of $11.50 on Canopy Growth Corp.