When word first broke that Drake was getting into the cannabis business, pot stock watchers everywhere stood up and took notice. The Toronto-born “Hotline Bling” singer is one of the biggest names in the music industry, and now he’s teaming up with one of the biggest names in the cannabis industry, Canopy Growth Corporation (TSX:WEED) (NYSE:CGC).
This partnership is one of the biggest things to happen to cannabis since legalization. Two Canadian icons are joining forces, and it’s got Rich feeling optimistic about the sector.
“Drake is in the cannabis game, do you know what this means? The guy is a global ambassador and a hip-hop legend, and now he’s selling cannabis in Toronto? Canopy Growth just took a step to be number one on the planet.”
Details of the Drake/Canopy Growth Collab
The joint venture between Drake and Canopy will be known as the More Life Growth Company.
More Life will take ownership of a licensed production facility in Scarborough, Ontario,, for the cultivation, processing, and sale of cannabis. Canopy Growth, meanwhile, will continue to operate the facility and retain the rights to distribute its product.
Once the company’s shares are issued, Drake will own 60% of More Life Growth, and Canopy will have 40%.
Commenting on the partnership, Drake said:
“The opportunity to partner with a world-class company like Canopy Growth on a global scale is really exciting. The idea of being able to build something special in an industry that is ever growing has been inspiring.”
Canopy Growth CEO Mark Zekulin shares the hip-hop superstar’s excitement over the partnership:
“Drake’s perspective as a culture leader and entrepreneur combined with Canopy Growth’s breadth of cannabis knowledge will allow our new company to bring an unmatched cannabis experience to global markets.”
CGC Stock Skyrocketing
Since the announcement, Canopy Growth shares have shot up 11.7%, from $25.13 to $28.07. So far, the rise in price shows no sign of slowing.
“I say Canopy Growth is a screaming buy,” says Rich. “I don’t care what the price of Canopy is right now, they just got one of the richest, youngest, hottest names in the world.”
Canopy will report its Q2 earnings on November 14. While it’s not clear how the partnership will affect the company’s outlook, investors are hoping things have turned around since the $1.3 billion loss in Q2 that resulted in the ousting of Bruce Linton.
One interesting factor is that the partnership may help Canopy get around some of Health Canada’s strict rules against cannabis promotion. Right now, it is illegal to endorse cannabis in a way that glamorizes it. Celebrity sponsorships are likewise against the law.
However, as Drake is a partial owner of More Life, he’s allowed to promote the company like any CEO or board member might. He’s not just a celebrity that Canopy Growth has hired, he’s a stakeholder.
Drake currently has 61 million followers on Instagram, and his YouTube channel has over 13 billion views. That’s a big audience that Canopy can target with More Life Growth.
What do you think? Is this partnership just what Canopy needs to return to its highs in April? Will Drake help turn the entire sector around? Let us know your thoughts.
Featured image: Flickr © musicisentropy