Canopy Growth Corp is the 800 pound gorilla of the pot sector, this fund manager says

We’re now over a half-year out from the start of legal recreational marijuana in Canada and while the industry is still taking its first steps, there are still a lot of unknowns about the space. That’s the takeaway for Jason Del Vicario of HollisWealth who says that if he had to pick a winner among the multitude of pot co’s, it’d be Canopy Growth (Canopy Growth Stock Quote, Chart TSX:WEED, NYSE:CGC).

“We have a difficult time understanding how a company is going to develop a competitive advantage in this space, when at the end of the day they’re producing a commodity, it grows in the ground and you cut it. There’s not really a way to differentiate oneself,” says Del Vicario, in conversation with BNN Bloomberg on Thursday.

“Having said that, there’s obviously clear demand for the product, and our sense is that there are going to be at the end of the day one or two leaders. And if I had to guess, Canopy Growth, being the largest and having some money behind them with Constellation Brands, etc., is probably going to be one of the companies that’s going to emerge from the ashes, if you will, of what we think will at some point be a day of reckoning for these companies,” he says.

Smiths Falls, Ontario’s Canopy Growth continues to wow onlookers with their dealmaking prowess, put on display again last month when the company announced a deal to buy US multi-state operator Acreage Holdings — a US$3.4-billion purchase that stands conditional upon significant movement at the federal level on the legalization of rec cannabis. Canopy followed that up with a move earlier this week which will see the licensed producer buy German medical cannabis research and development company C3 for $343 million.

The action comes as Canopy’s stock price flirts with the $70.00 mark, not seen since the frenzied days leading up to legalization in Canada last October. Altogether, Canopy is now worth a whopping $23 billion in market capitalization.

“They’ve shown an adeptness at consolidating within the industry,” says Del Vicario. “If we had to own a company in the space, this would be it.”