The marijuana industry has become a hotbed of investment activity, and players of all sizes are looking to get into the action. On top of all the interest from ordinary investors, cannabis companies have seen demand rise from sophisticated institutional investors that have experience with deploying larger amounts of investment capital in search of high-growth opportunities.
One of the most interesting marijuana investment specialists that investors can follow is Canopy Rivers (CNPO.F -2.96%). With a close strategic partnership and initial cornerstone investment from cannabis production company Canopy Growth (CGC 4.76%), the Toronto-based Canopy Rivers has a team of investing professionals that look to identify companies that have high-growth potential and are interested in joining the Canopy Growth network of cannabis businesses. So far, Canopy Rivers has identified 11 companies in the marijuana industry for investment, and it hopes that positive network effects will help foster their development in the years to come.
Canopy Rivers' mission
Canopy Rivers' intentions go beyond simply picking marijuana stocks and riding rising share prices higher. The company sees an ability to use its relationship with Canopy Growth to create a cannabis ecosystem in which its investment targets can thrive. By selecting cannabis companies whose businesses complement each other, Canopy Rivers not only benefits directly when it brings a new prospect on board but also benefits indirectly from the positive impacts that the growing network has on its existing members.
The way in which Canopy Rivers invests in growing marijuana companies also points to the flexibility of the investment approach. In addition to simple equity, Canopy Rivers provides choices like secured debt, joint ventures, and production-linked royalties to its investment candidates. That's especially valuable in helping Canopy Rivers align its own economic interests with the business needs of the cannabis companies in which it takes positions.
The 11 companies in Canopy Rivers' portfolio
Currently, Canopy Rivers has 11 different companies listed on its website as being in its portfolio. Among them are seven players that are currently privately held:
- Agripharm is a licensed producer of medical marijuana in Canada. The company was acquired by Canopy Growth in early 2017, and it has subsequently entered into joint ventures with key producers of cannabis seeds and other products with an eye toward eventual broader distribution.
- CanapaR has an Italian subsidiary that's looking to develop and commercialize local hemp cultivation within Italy. Working with local farmers in Sicily and elsewhere, CanapaR hopes to obtain low-cost cannabidiol oil for use in a growing set of products targeted at wellness and healthcare.
- Civilized Worldwide is a media and lifestyle/culture specialist that's working to boost engagement among a growing group of cannabis users. With more than 2 million monthly unique visitors across North America, Civilized hopes to provide valuable information about the cannabis culture.
- PharmHouse is a joint venture between Canopy Rivers and major agricultural greenhouse-produce companies in North America. The business has obtained greenhouse facilities and intends to build up its capacity over time.
- Radicle Cannabis boasts a team of cannabis growers, breeders, scientists, and patients along with medical doctors. Based in Hamilton, Ontario, the Canadian company has an optimal location to access transportation capabilities across the continent.
- Spot Therapeutics is a major player in the cannabis industry in Canada's maritime provinces. Acquired by Canopy Growth in August 2017, Spot's New Brunswick facility now operates under the Tweed brand name.
- Vert Mirabel is a joint venture between Quebecois greenhouse operator Les Serres Stephane Bertrand and Canopy Growth and Canopy Rivers. Known for growing pink tomatoes, Bertrand retrofitted a greenhouse for cannabis production, and the now-licensed facility provides supply for the marijuana market in Quebec.
In addition, Canopy Rivers counts several publicly traded companies among its investments. James E. Wagner Cultivation has a unique aeroponic production technology that could revolutionize growth by allowing for ongoing harvesting opportunities. Nutritional lifestyle company LiveWell Foods Canada specializes in technology for the produce and food industry, with distribution capabilities that include hemp products. Solo Growth is seeking to climb onto the retail cannabis bandwagon in Canada, with key players associated with liquor retailer Solo Liquor's half century of experience in retail and distribution.
The best-known marijuana stock in Canopy Rivers' portfolio is TerrAscend (TRSSF -11.88%). This investment best shows the power of the Canopy Rivers approach as well, because as part of the deal that brought the company into the fold, TerrAscend agreed to join Canopy Growth's CraftGrow platform. That gives TerrAscend key access to the distribution network that Canopy Growth has built out, and investors have high hopes that TerrAscend can take maximum advantage of that access to become a much larger player in the cannabis industry.
Keep your eyes on Canopy Rivers
As the marijuana market evolves, different companies will jockey for position in the fast-moving field, and Canopy Rivers will have further opportunities to take strategic stakes in promising up-and-coming companies. For those looking for ways to profit from future growth in cannabis, Canopy Rivers' portfolio offers a good overview of some of the most interesting investment plays in the business right now.