I need an essay about the company that is Canopy Growth
and it should be followed
"Value Chain analysis" : Determine your firm's Competitive Advantage/Core Competencies vis-a-vis its current competition using the value chain model by one page.
I will attached essays I have submitted so far and please read them before starting the essay.
Thank you for reading this.
Canopy Growth Corporations
A Company with High Ambitions
As North America’s leading producer of legal marijuana, Canopy Growth Corporation has
always been ambitious. Canopy, formerly Tweed Marijuana Inc. was founded by Bruce Linton,
Mark Zekulin, and Chuck Rifici in 2013 with the objective of providing affordable medicinal
cannabis to patients. Their concept of “Compassionate Pricing” would become a standard
industry-wide. This is just one of the few benchmarks the company has set.
In 2014, Tweed became the first publicly-traded cannabis company in North America with stock
being traded on the Toronto Stock Exchange. The following year, the company purchased an
abandoned Hershey factory in Ontario, where they still operate to this day. Later in 2015, the
company grow from“..a singular enterprise to a multi-branding holding company that can focus
on diversified markets.” and changed their name to Canopy Growth Corporations. In 2018,
Canopy Growth Corporations achieved another first when there were the first cannabis company
to have the shares made available on the New York Stock Exchange.
Figure 1. International Footprint (Canopy Growth 2018)
Currently, Canopy Growth has a total of 11 operating facilities in Canada in addition to their 10
other facilities in places such as Poland, Columbia, and Denmark. And, by partnering with
numerous brands, they are able to provide their customers with a wide variety of medicinal and
recreational products such as “dried flower”, oils, concentrates, supplements, and hemp.
The company's current mission is to elevate the experiences of its medical and recreational
consumers, and drive the biotechnology industry forward. This well-articulated statement clearly
defines the purpose of the company. Moreover, it’s realistic and motivating. The main focus is
on satisfying the needs of the recreational and medicinal customers as opposed to the company’s
products. Customer experience is a key factor for a company’s growth. since if a company meets
and exceeds customer expectations by delivering quality products as promised, the company is
destined for growth and success. Additionally, the company’s emphasis on their aspirations in
the biotechnology industry reinforces their desire for continued growth and innovation. It can,
therefore, be concluded that this mission statement is quite effective.
The vision of Canopy Growth Corporation is to be a leading cannabis company in the globe.
While this statement is clear and describes the company's desired future state. The statement is
broad and lacks distinctiveness as it can be applied by any organization in the cannabis industry.
The company would have taken another step to align its intended efforts to complement this
vision. Surprisingly, the Mission Statement is more inspirational. A more effective vision
statement would have expanded on this. Currently, it’s too generalized and so the company
might scatter its efforts into other goals not aimed at supporting this vision statement. This can
inhibit the company’s direct progress toward this vision.
Canopy Growth’s values are aligned with Corporate Social Responsibility. Their values
statement is as followed. “Canopy Growth is committed to being a responsible member of our
community and industry wherever we operate. We pride ourselves on investing in and being the
leader in creating solutions to cannabis-related issues. Now that we’re on the verge of legal
access to regulated, recreational cannabis, we’re stepping up to do our part to ensure education
and responsible use are at the forefront of the cannabis conversation.” This statement is lengthy
but hit all of the right notes. Canopy Growth is determined to find solutions to cannabis related
problems and had made strategic partnerships in to have their goals realized. They have
partnered with Mothers Against Drunk Driving and Canadian Drug Policy Coalition. Another
alliance is with Parent Action on Drugs (P.A.D). It is important that their customers and
investors know that they are passionate about growth in their industry as well as educating and
corporate social responsibility. This statement is supported by their numerous alliances. Thus it
is quite effective.
The performance of Canopy Growth Corporation over the last five years has increased
tremendously. According to Bloomberg data, in 2014, the company reported sales of $3.4 billion.
In 2015, the revenue reported sales of $7.7 million. In 2016, there was an increase in sales as the
recreational market expanded and the company had $12 million in revenue. At the end of 2017,
the company’s revenues rose considerably to $39.9 million following an increase in the purchase
of medicinal cannabis units (Kristine, 2019)..
The year 2018 saw an increase in the amount of cannabis harvested and revenues rose to $ 77.9
million. In 2019, the company hopes to achieve an extreme increase in revenue earnings
following its expansion into the skin care market. In an interview with Susan (2019) of
Bloomberg News, the company's CEO Bruce Linton stated the company's team productivity has
been quite impressive over the last five years and this has been a contributing factor to Canopy’s
success. Despite it’s increase in revenues, Canopy Growth Corporation continue to report losses
and investors continue to question the company’s profitability, resulting in the termination of
Co-founder, Bruce Linton. Canopy’s lack of profitability is due to its focus on investing in long
term growth, keeping an entrepreneurial mindset in a rapid growing market, which resulted in its
phenomenal 90 patents and continued revenue growth, forecasting the company to have large
future rewards and market share.
● Canopy Growth Corporation. Retrieved from www.canopygrowth.com
Freeman, S. (2016). Canopy Growth Corporation to acquire Mettrum for $430
M-making a mega-company serving half Canada’s medical pot users. Retrieved
June 28, 2017
● Kristine Owram (2019). Canopy Analysis. Retrieved from
● Paul Monica (2019).Canopy’s cannabis business growth. Retrieved from
● Susan Berfield (2019). Canopy’s Bruce Linton. Retrieved from
● Canopy Growth. (2019, September 11). Retrieved from
● Our Story. (n.d.). Retrieved from https://www.tweed.com/en/our-story
● Marijuana company heads to New York Stock Exchange. (2018, October 25).
● Our Story. (n.d.). Retrieved from https://www.canopygrowth.com/about/
● Corporation, C. G. (2018, December 23). Tweed Marijuana Inc. Renamed Canopy
Growth Corporation. Retrieved from
CANOPY GROWTH CORPORATION The External Environment
INTRODUCTION An organization's external environment is significant in that, in many ways, it influences their
ability to succeed. Much of Canopy Growth’s vision is to expansion. Therefore it is imperative to
understand how these external elements can encourage, as well as hinder, their ambitions.
Implementing a PEST analysis is a simple, but very effective, tool that allows an organization to
understand how political, economic, social, and technological trends impact Canopy Growth and
the legal cannabis industry.
Political Influences The most significant political influence for Canopy Growth would be that of the Canadian
Government. Despite it being a multinational company, this is where their operations began and
still primarily exist. When established, the laws surrounding cannabis restricted the use of
cannabis for medicinal use only. After being elected in 2015, Prime Minister Justin Trudeau took
an initiative to reduce criminality associated with sales of non- regulated cannabis. As a result, in
October of 2018, the Cannabis Act has made the use of medicinal and recreational cannabis legal
across all of Canada. This law limits the sales and production of cannabis products to
organizations licensed by the government.
As previously stated, the Cannabis Act of 2018 was designed to reduce criminality by restricting
cannabis access to minors (below the age of 18) and profits of illegal distributors. Prior to the
law, illegal sales were estimated at CAN$6 billion, or $4.4 billion USD, a year.(5) Under the
law, one is legally allowed to possess no more than 30 grams of legal cannabis products with a
THC level of .3% or more. Much like alcohol restrictions, driving under the influence will also
result in serious consequences. Moreover, even if it is legal in that country, it is illegal to cross
any national borders with cannabis products. This includes bringing outside cannabis into the
In addition to these regulations for domestic consumption, the Cannabis Act has restrictions
pertaining to importing and exporting cannabis products. Importing is strictly restricted to
“starting materials” for new licensee’s. Exporting is limited to medicinal products or scientific
research in countries/states where it is legal. Additionally, the producer has to have a permit for
exporting in addition to all other permits required as a legal distributor. Permits are given after
careful and strict consideration by Health Canada. They are careful to not break any obligations
set forth by treaties and ensure exports are in line with the regulations of the Cannabis Act.(6)
As strict as the government and lobbyists have been about who and how individuals are allowed
to buy and sell, there appears to be a disconnect in how the cannabis industry operates in regards
to the safety of their environment. Many consumers complain about the excessive packaging
used by legal distributors. This is a direct result in the guidelines created by Health Canada.
Before legalization, much of cannabis products were sold in plastic bags that were easy to
dispose of but made access easier to young children. Under the new laws, packaging must be
able to prevent any contamination to the product, tamper-proof, and child-proof. The containers
used now are described as large plastic containers that are disproportionate to the amount of
cannabis inside. This is due to all of the required information that are required by law to be
printed on the package. These strict regulations make it incredibly difficult for distributors to
provide containers that are more environmentally friendly. This has had an impact on whether or
not someone will buy from a legal distributor.(8)
Currently, Canada has an economic freedom score higher than any other American regions and
above world-wide averages at 77.7. Having the 10th largest economy, the government is focused
on trade diversification, increasing exports, as well as supporting their domestic industries small
and large. According to the 2019 index of economic freedom, “Canada’s economic
competitiveness has been sustained by the solid institutional foundations of an open-market
system and a high degree of regulatory efficiency.” (9)
The cannabis industry is fairing well since legalization in 2018. This “Budding Market”(10) has
seen an increase in usage since legalization. As it is a newer industry, it should come as no
surprise that it is estimated to provide new jobs and boost local economies. This is evident in the
amount of licenses issued since legalization. Moreover, it is anticipated that the Canadian
government will collect $400 million annually from taxes levied on sales of cannabis at $10 a
gram. (11) However, the high levels of taxation can be detrimental to Prime Minister Trudeau’s
intent on reducing criminal activity in relation to cannabis products. . The heavier the tax rate
imposed on retailers, the likelihood that customers will turn to illegal sources. This can be seen
in the state of California, where legal distributors are plagued by taxes that make it impossible to
compete with the black market.(12)
Socio-cultural Trends Cannabis has been used in many cultures as medicine and other aspects for thousands of years,
as early as 10,000 B.C. in China. Due to the opium epidemic and surge in alcohol consumption
post Civil War in 1800’s, there were increased concerns of mind altering drugs and effects of
similar products. Consequently, other drugs were also categorized as harmful products, including
marijuana and has become illegal since 1937. In the 1930’s a film was even produced to teach
the public about the dangers of marijuana which skewed the public perception even further. In
1970, it was officially listed as a Schedule I substance in the U.S. Controlled Substances Act.
Since then for almost 90 years the opinion of marijuana as a whole in the eye of the public was
similar to the views of psychedelic drugs as detrimental and sometimes even fatal products.
However, this stigma soon began to change, giving way for a new view on cannabis. As the
potential medical benefits of marijuana became more publicized, the perspective of marijuana
changed. There was a significant shift in consumer perspective over cannabis as well as
government policy as more knowledge developed. In just 50 years, the amount of Americans
who believed marijuana should be legalized increased five times as much, up to 62%. This plant
is now widely accepted for patients with chronic pain and seizures. Change in consumer values
for more authentic, transparent, natural lifestyles supported the movement towards accepting
marijuana use. (3)
Soon enough once illicit substance, became legalized in over 33 states, of which 10 states allow
recreational use of marijuana, with rapid growth of marijuanas popularity, breaking it’s previous
stigma. CBD’s, a natural compound within cannabis plants, gummies today are the third most
researched food term on Google. It
also comes in many forms, continuing to win consumer popularity. This industry has grown
tremendously in a short period of time and continue to see support from other companies,
winning heavy investments. In 2018 the industry for legal marijuana in the U.S. consisted of
$10.4 billion and 250,000 jobs, expected to increase to $17.5 billion in 2030. Worldwide,
cannabis spending is expected to reach $66 billion in 2025. Overall, the consumer and
investment views are strong, projecting a large increase in the medical marijuana industry and a
significant increase in legal cannabis spending.
Technological Trends Technology is a major player for the future of this industry. An industry that is in its early phases
and whose previous illegal sales consisted of predominantly cash sales, companies can now
better understand cannabis consumers purchasing habits with new technologies like software as a
service (SaaS). This also enables the industry to properly track products, which was otherwise
not possible previously.
Additionally, the cost of growing cannabis is relatively high, which is why technological
innovations as small as LED lights spectral tuning, improved hydroponics and Tesla’s
Powerback solutions are revolutionary to the marijuana industry, giving companies more control
over production. Biosynthesis has also paved the way for efficient extraction techniques that
allow for better on-demand production. Seeing that sales and consumer confidence are expected
to increase, efficient production is key go meeting a rapid growing demand. Some technological
innovation now facilitate the at home use of marijuana. This includes products like infusers,
vaporizers, smart grow boxes, and more (1). As technologies like AI, machine learning and
blockchain continue to grow, we may see it’s application in the cannabis industry, especially
INDUSTRY STRUCTURE ANALYSIS
Porter's Five Forces Analysis
The cannabis industry has not been fully exploited to maximum potential due to the legal barriers
in place. However, Canopy Growth Corporation has been able to operate within the legal
jurisdictions in North America. This paper shall, therefore, discuss the company's business policy
that has harnessed its growth.
The company was faced with various barriers of entry at the beginning. At first, cannabis was
not a legal drug in Canada. These legal issues made it hard for the company to obtain permits for
the production and sale of cannabis. However, the company received a breakthrough when
marijuana was legalized for recreational use (Cox, 2018). Canopy Growth has a great deal of
competition the company must look out for. One of the main competitors is Aurora Cannabis
because Aurora so far have been 20 percent of the marijuana market in Canada. Also they
produced over 700,000 kilograms per year. Another competitor that Canopy Growth must watch
out for is Cronos Group because Cronos used to be on top of the race to become the alpha
company but due to being to slow on establishing assets, it lost its lead. Canopy Growth has to
make sure they are selling products that the other companies don’t have. Also since the
Marijuana is an upcoming market, focusing on getting curious/new customers should be a
priority to make them become loyal consumers.
Canopy Growth has lot of suppliers which makes supplier power low due to Canopy’s
ability to just switch suppliers. Due to high demand of the marijuana industry, suppliers
have to be very reasonable with Canopy Growth in order to achieve profits, which also
causes suppliers to have less power. Canopy Growth just needs to find the right suppliers
that has low costs but due to its abundance of suppliers, using different suppliers
shouldn’t be a problem. The company's wide range of products is also a strength that has
allowed the company to generate more revenue and therefore strengthening its position
in the cannabis industry. Canopy Growth Corp has since ventured into a global market
and thus diversifying its operations.
Having products that are unique from others should be a top priority for Canopy Growth because
in this industry, having someone hooked on your products will get you more buyers. If a
customer likes the product, they will buy it in bulk, because it’s marijuana, and it will make it
harder for the customer to ever switch if the quality is top notch. Since the buyer will buy the
products in bulk, prices shouldn’t be a problem due to the demand and quality. Canopy Growth
should highly market and make sure it’s product are unique to build a large foundation of loyal
customers. Doing so will provide a lot of sales and henceforth a profit.
The threat of new entrants isn’t a big problem for Canopy Growth because the industry it’s in is a
hard industry for new entrants to come in. This is due to the fact of the government heavily
regulating laws for marijuana and the fact that Canopy Growth sells differentiated products
instead of standardized products. If Canopy Growth keeps using it’s competitive advantage it has
and keep having unique products, new entrants would have a lot of trouble competing against
them. Canopy Growth Corp has been able to overcome threats of new entry. Besides, by
producing raw materials, the company has been able to deal with supplier power. The buyer
power of the Canadian people has also been exploited.
A threat of substitutes would be the Illegal Marijuana Markets because if the prices are better
there then customers would hesitate to get products from Canopy Growth. To stop that from
being a big threat, Canopy Growth needs to make sure it’s products are great quality especially
more then the illegal products, also having unique products that only Canopy Growth can
produce, will make it harder for customers to find an alternative.
Porter Five Forces for Canopy was Growth
With the strong political support for legalized cannabis usage in Canada, and the continued
efforts to increase legalization in the U.S., Canopy growth has major potential to maintain their
industry advantage. As the industry continues to grow, there will be higher demand for
marijuana and other cannabis products. Economically, it makes sense for them to increase their
efforts to maintain their sympathetic pricing model so that they are competitive with black
market distributors and satisfy government regulations. Biotechnology will be necessary for
companies to keep up with rapid changes. Intellectual Property will also be a growing concern as
new players continue to be attracted to the industry. As this can start becoming a commodity, this
will be a huge risk for cannabis companies. Additionally, higher demand in this new and
evolving industry will require FDA understanding and steeper regulation.
REFERENCES 1. https://www.digitaltrends.com/home/marijuana-tech-for-home/