This is an essay about the Business Policy.

Canopy Crowth Competitive Analysis

Canopy Growth Corporation is leader in the cannabis industry. However, it has also had

its share of competitors, with a potential growth as Marijuana becomes legalized around the

world. Today, Canopy’s largest competitors are Aurora Cannabis, located in Bristish

Columbia,CA and Trulieve, located in FL,US. All three companies operate as a healthcare or

consumer products industry and are licensed marijuana producers.

Marketing Comparison

Products: As the world’s largest legal cannabis distributor, Canopy Growth has an extensive variety

of medicinal and recreational products to offer their consumers. Tweed, the company’s original

brand, is recognized world-wide. In addition to cannabis, they are well known for their CBD soft

gels. As previously stated, the company has been ambitious from the beginning. Since it’s

inception, numerous additional brands operate under the Canopy umbrella. Brands like DNA

Genetics and CraftGrow are dedicated to innovation in cannabis market. Conversely, Spectrum

Therapeutics is Canopy’s world-wide medicinal brand focused on patient education and the

simplification of purchasing medicinal cannabis products. (14)

Aurora Cannabis, Canopy’s rival in Canada, is a cannabis company that focuses their

endeavors on supplying medicinal products.

Pricing:

Placement:

Promotion:

Current Business-Level Strategy (Jonathan)

(low providers?differentiators?how? Focus or niche players? What segment?)

Financial Comparison

Sales:

Canopy continues to take the lead with 10,102 kilograms of marijuana sales,

approximately four times the amount sold a year back. Their growth continues to exceed with

stock prices over two times it’s competitors in the NYSE, Canopy Growth takes the lead with

$20.45USD. Aurora’s listed as $3.70 and Trulieve as $10.14. Additionally, Canopy Growth

Corporation has seen a net revenue of C$90.47M recently.(1) Ending year June 2019, Aurora

has produced net revenue of C$247.9M, nearly $187.35M USD, whilst Trulieve has seen

$57.9M, approximately C$75.8M, despite it’s earlier year projections of $214M. The sales for

Aurora have surged to 349% increase and a production increase of 920%.(2) Canopy has had a

yearly sales growth of 249% while Trulieve trailed back with a 130% increase in growth. For the

quarter as Aurora increased by 61%, Canopy saw a drop to -4%.(3)

Profit:

However, Canopy’s high costs continue to rise along with all their growth approximately

at a slightly faster rate. Canopy has seen a quick rise in costs in just a year alone including

C$9.4M marketing costs that increased to C$44.9M and C$11.1M in administrative costs which

increased to C$46.1M.(4) Due to Canopy’s increasingly high costs, they are currently seeing no

profits, instead a hefty loss of C$-1,281,168,000, similarly to Aurora.(5) The costs are being

significantly impacted by its production needs in property plant and equipment, specifically,

assets in process, buildings, greenhouses, production and warehouse equipment as well as costs

of subsidiary acquisitions. Additionally some other high intangible costs are affecting the bottom

line significantly including operating licenses and intellectual property costs. The investor

confidence is not high for Canopy Growth, nevertheless, investors counter options are trailing

too far behind. With Canopy’s biggest competitor Aurora selling only 6,999 kilos of marijuana.

Production capabilities in this sector have become increasingly important as legalization opens

up consumer demand globally.

Aurora Cannabis has seen a total net revenue of C$247,939,000 and a net loss of

C$-290,837,000.(6) On the other hand Trulieve has seen a total revenue of $57,920,112 and a net

income of $57,528,785. (7) Trulieve has been operating with a total profit as opposed to a loss

like Aurora and Canopy. Although Trulieve has not seen a bigger loss than top two Canadian

cannabis companies, Aurora and Canopy, this does not put Trulieve at an advantage. it’s

production capabilities and innovation has been far less, with no investments in Research and

Development compared to Canopy’s C$8,474,000 and Aurora’s C$14,778,000 investment.

Market Share:

Aurora is valued at…, while Cronos and Tilray are valued at 5.8B and 3.5B respectively.

However, Canopy Growth is a clear leader with a 12.1B valuation​. ​Aurora and Canopy are neck

to neck in competition. Both seem to perform similarly with large revenues and increasing

production costs, their growth as well as their trajectories seem to be almost synced. As of

October 2019 Canopy’s recent fall to second place in this quarter may be due to the departure of

CEO, Bruce Linton. On the other hand Trulieve may be seeing the effects of states still not

legalizing marijuana for medical or recreational use. All industries face some form of scare with

issues such as Vape health concerns currently arising. This is a hurdle for all companies globally,

but is heavily being seen in the US for Trulieve. These concerns could possibly be causing the

stunt in growth for many cannabis selling companies in the US, compared to the massive growth

for Canadian companies.

(8)

Although there doesn’t seem to be sufficient information in the share of the market by

each company, due to the mass amount of acquisitions happening frequently and the novelty in

this industry, we discovered that Aurora has a market share of 20% in Canada. (9) Increased

competition has led to a difficulty in companies penetrating the market and remaining strong,

lasting in this industry. It has also created a ban on inter-state trading across the US, which is a

big concern for companies. (10) Nevertheless, there is a discussion of the market share of

cannabis by product type. Most sales seem to be in the form of Buds. This is due to the use for

smoking and affordability. However due to the unknown level of consumption of CBD and THC

within buds, oils seem to be expected to grow faster. A market that was predominantly used for

medical purposes, now sees a leveled market share with cannabis as a recreational use. In 2025,

the use of cannabis recreationally is expected to surpass cannabis for medical use.

(10)

(10)

Comprehensively, consumer confidence seems to be growing as pot stocks continue to

rise in the market. The growth of marijuana demand is said to increase as recreational marijuana

becomes legalized. However, this will be a battle of whose production can keep up with an

expected growth in demand and so far, Canopy seems to be advantageous in this aspect.

Value Chain Analysis

Canopy growth is North America’s lead producer of marijuana that is legal. It was

formerly known as Tweed Marijuana Inc. And has become famous for its rapid growth over the

years since its inception in 2013 by Chuck Rifici, Mark Zekulin and Bruce Linton. The main aim

for its formation was to provide patients with affordable medicinal Marijuana.

Value chain analysis refer to the process in which a firm identifies its support and

primary activities and focuses on value addition of the final product and the analysis of these

activities, therefore resulting in reduced cost or increased differentiation of products. Potus value

chain model highlights the need to enhance primary activities such as; inbound logistics,

operations, outbound logistics, sales and marketing and service, and support activities such as

firm infrastructure, procurement, human resource management and technology, so as to gain

profit in the long run.

From Canopy growth, we see that Canopy Growth was majorly founded with an

objective of providing Cannabis patients with affordable medicine. They adopted a concept

known as Compassionate Pricing, which has since become a standard worldwide, and has

become something for other companies to bench mark. This concept in the long run encourages

more sales for Canopy compared to competitors, thus yielding higher profits. Another useful tool

for Canopy is the application of technology, in this case biotechnology. This goes a long way in

improving its products and services, hence attracting more customers and yielding more profits.

Also the fact that Canopy works with numerous brands, means more diversification of products

and more profit, compared to other firms.

Over the years, Canopy has also managed to attract a lot of sales, with 2018 recording the

highest revenues of $ 77.9, showing it is making profit relative to other companies. The fact that

it was the first company in the Toronto stock exchange, and later the first company at New York

stock exchange shows that these occurrences make it a pioneer, hence Canopy growth has had a

large uncompleted opportunity to seek for investors, expand its operations and yield more profit.

Assessment

(Understanding of primary competitors? Business strategies? Strength and weaknesses?)

References

1. https://www.newcannabisventures.com/stock-cgc-twmjf-canopy-growth-corp

2. https://www.ibtimes.com/marijuana-stock-aurora-cannabis-posts-349-sales-growth-launc

hes-new-products-year-2827347

3. https://www.newcannabisventures.com/cannabis-company-revenue-ranking/

4. https://www.marketwatch.com/story/canopy-growth-shows-surging-pot-sales-in-late-arri

ving-earnings-report-2019-02-14

5. https://www.canopygrowth.com/wp-content/uploads/2019/08/Q1-FY2020-Financial-Stat

ements-Final.pdf

6. https://finance.yahoo.com/quote/ACB/financials?p=ACB

7. https://investors.trulieve.com/static-files/e3092d0d-5d97-4d2b-be72-c1e53c24a9d2

8. https://disa.com/map-of-marijuana-legality-by-state​l

9. https://www.marketwatch.com/story/aurora-cannabis-earnings-show-big-growth-in-pot-s

ales-but-worrisome-profit-trend-2019-02-11

10. https://www.grandviewresearch.com/industry-analysis/us-cannabis-market

11. https://craft.co/canopy-growth/competitors?competitors=canopy-growth%2Corganigram

%2Ctts-pharma%2Ctilray%2Ccronos-group%2Caurora-cannabis

12. https://seekingalpha.com/article/4224627-canopy-growth-cannabis-market-leader

13. https://www.fastcompany.com/90285740/how-canopy-growth-became-the-jolly-green-gi

ant-of-cannabis

14. https://www.canopygrowth.com/brands/

15.