Drake has inked a deal with Canopy Growth, the massive Canadian cannabis company that is struggling to recover losses and move on after firing its CEO.
The partnership is causing some head scratching in cannabis investment circles, with stock watchers wondering if this is a good move for Canopy and what kind of heft ‘Drake net worth’ can bring to the cannabis industry.
So, what does Drake bring to the table that Canopy lacks? Do his sixty million Instagram followers represent an untapped market? Or does the music mogul have brand new ideas that the world’s largest cannabis company can capitalize on?
Drake Net Worth: More Valuable than Marketing?
It could be every company in “The Six” has to partner with Drake, Toronto’s most-famous resident. And there’s little doubt that Drizzy can bring publicity to anything he touches.
But this new deal amounts to creating a new “cannabis wellness company.” It’s called More Life Growth and will be sixty percent owned by Drake and forty percent owned by Canopy. This seems more like a diversion than turning around Canopy’s finances. Or is it?
According to MarketWatch, Canopy’s stock plummeted more than seventeen percent on Nov. 13 after posting weaker-than-expected earnings in the crucial second quarter.
The company attributes the shortfall to government regulations and a crowded market, noting that the in Ontario, where forty percent of Canadians live, there is one cannabis store for every 600,000 people. Canopy believes more stores will help correct the earnings forecast in the future.
No matter how much buzz the former Degrassi star can bring to More Life Growth, it’s hard to imagine it can translate into a seventeen percent stock price bump for Canopy.
Will The Promise of Drake Net Worth Bring More Life into the Brand?
So maybe seventeen percent is out of reach — but the life-infusion from Aubrey “Drake” Graham pumped up Canopy’s numbers. The stock rose eleven percent following the announcement! This could not only help Canopy, but the entire troubled industry quite a bit. Search up Drake net worth and maybe now you’ll see the sense in the partnership. Could the Canadian rapper be a Midas for Canopy?
This stock movement could be telling. The Drake deal is different from the other celebrity endorsements because the pop star now owns the controlling interest in the company. This means that a Drake net worth can be used as leverage to get More Life Growth off the ground and suffuse the brand into the minds (and pocketbooks) of Ontario’s cannabis consumers.
That doesn’t change the larger picture for Canopy — there still aren’t enough dispensaries in Ontario to help turn a healthy profit — but it certainly helps.
If You’re Reading This, It’s Already Too Late
Drake may be CEO of More Life Growth, but no matter how many rap feuds he starts, he probably can’t top the outrageousness of Canopy’s last head honcho. At least in terms of the stock market.
The founder and former co-CEO of Canopy Growth, Bruce Linton, was forced out in July after the company failed to meet earnings forecasts. The company’s “long game approach” led to fast growth, but slow profitability. Some board members saw Linton’s strategy as poorly matched to the new legalized market. It is reminiscent of the Silicon Valley growth first, profit second philosophy.
From October 2018—April 2019, Canopy brought in $356 million in sales (that’s Canadian dollars), which was far below expectations.
And its flagship cannabis, Tweed, has been rated among the worst available in Canada. (Seriously — an official company post included the phrase, “what it lacks in scent, it makes up for in appearance.” Ewww. And a cannabis consumer group on Reddit devoted an entire thread to stories from people who’d bought Tweed strains and were throwing them away.)
Can Drake Bring the Dank?
So, what does Drizzy get out of this? Drake’s net worth is already north of $150 million. So, why did he become the major investor in a company backed by Canopy? According to a statement he gave Rolling Stone, Drake said, “The idea of being able to build something special in an industry that is ever growing has been inspiring. More Life and More Blessing.”
And if that’s not saying much, Drake’s social media is saying even less. He shouted out the company on his Instagram account and linked to its account — which is private and has only nine posts.
He also spent some time sending flowers to people in the name of More Life, again without saying what exactly the company will do.
This all could be part of a master plan to buzz market More Life Growth. Still, it feels too scattered to be effective. But Drake could fool us all.
We started from the bottom, now we’re here — wherever that is.