Ever since Constellations Brands (NYSE:STZ) took a sizable stake in Canadian cannabis aristocrat Canopy Growth (NYSE:CGC) back in November of last year, CGC stock has been the pot-stock investment of choice. The weed-stock rout that started this past summer and lasted all the way through September, however, has cast a pall on the entire cannabis sector and tested the conviction of Canopy shareholders.
To dump one’s shares today would be a huge mistake, however, as a recent and exciting development indicates a possible new direction for the company. At the very least, it’s emblematic of the broader cannabis industry’s expansion into mainstream culture — and a compelling reason to pick up a few more shares of Canopy Growth stock.
CGC Stock Becomes a Sports-nutrition Play
So here’s the game-changing news: Canopy announced its purchase of a majority stake in BioSteel Sports Nutrition, a company that specializes in sports-nutrition products. BioSteel has been around since 2009, and the company’s beverages are primarily marketed to high-performing athletes, which would explain why BioSteel’s brand ambassadors include hockey star Wayne Gretzky, as well as the Dallas Cowboys’ Ezekiel Elliott and the Jacksonville Jaguars’ Jalen Ramsey.
Biosteel also has partnerships with notable sports organizations including the Professional Hockey Players Association, Canada Basketball, Athletics Canada, and USA Hockey. In other words, the company is firmly entrenched in North American sports culture.
According to the all-cash deal, Canopy Growth is securing a 72% stake in BioSteel, with the possibility of a full acquisition remaining on the table. Given that BioSteel literally has 10,000+ North American distribution points for its hydration and sports-nutrition products, I’m amazed at how under-reported this deal has been within the mainstream media.
Progress in the Mainstreaming of CBD
Whether you choose to invest in Canopy Growth stock or not, it’s nearly impossible to deny the potential good that today’s legalized hemp products could provide to the medical community. As Joseph Maroon of the University of Pittsburgh’s School of Medicine explains, research has indicated that CBD or cannabidiol presents “anti-nausea, anti-anxiety, antioxidant, anti-inflammatory and analgesic effects as well as other disease specific benefits.”
For this reason, I’m glad to see that the eminent leader of Canadian cannabis is joining forces with a sports-nutrition up-and-comer like BioSteel. If anything, this partnership has the potential to revolutionize the sports community and steer athletes toward healthier alternatives to controversial performance-enhancing chemicals.
BioSteel Sports Nutrition co-founder and co-CEO Michael Cammalleri tends to agree with me on this point, and he isn’t afraid to vaunt his company’s achievements in this regard:
“The use and acceptance of CBD-based products in the professional sports landscape has changed. We have witnessed the negative effects of prescription painkillers and athletes are looking for healthier alternatives. Its presence is already commonplace amongst NHL players and as a regular CBD user myself, I couldn’t be more proud to champion BioSteel’s evolution and leadership in this space.”
Canopy Growth CEO Mark Zekulin is equally proud to highlight BioSteel’s strong position in the sports-nutrition niche, along with the possibility that the Canopy-BioSteel partnership could extend beyond the arena of athletics:
“BioSteel has a reputation for being a best-in-class provider of natural sports nutrition products and all of its products are well positioned to benefit from the increasing trend of plant-based and all-natural products, preferred not only by professional athletes, but active consumers as well.”
I fully concur with Zekulin’s assessment of BioSteel as an ideal avenue for Canopy’s foray into the wide world of sports. It’s a massive market that’s ripe for the picking, and if any company has the capital and the brand-name recognition to make a move into CBD-centered sports nutrition today, it’s Canopy Growth.
The Takeaway on Canopy Growth Stock
Even if you never plan to use CBD-infused products or don’t care much for sports, you can still investigate and appreciate the explosive combination of Canopy’s leadership position in legalized cannabis and BioSteel’s strong roots in sports culture — and you can start buying up some CGC stock shares, if you dare.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.
