Why Pre-Rolls Are Cannabis' Most Profitable Format, From California To Canada
Written by Emily J. Thompson, Senior Investment Analyst
Source: Benzinga
California's Pre-Roll Market: In California, pre-rolls have become a dominant force in cannabis sales, accounting for 16.1% of total sales with brands like Jeeter and STIIIZY leading the market, particularly with infused products making up a significant portion of sales.
Canada's Steady Growth: In Canada, pre-rolls represent about 32% of legal cannabis sales, with a slower growth rate compared to California; however, brands are beginning to adapt and innovate, indicating potential for disruption in the market.
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Analyst Views on CGC
Wall Street analysts forecast CGC stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CGC is 3.78 USD with a low forecast of 1.80 USD and a high forecast of 5.76 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
3 Analyst Rating
1 Buy
2 Hold
0 Sell
Moderate Buy
Current: 1.110
Low
1.80
Averages
3.78
High
5.76
Current: 1.110
Low
1.80
Averages
3.78
High
5.76
About CGC
Canopy Growth Corporation is a Canada-based cannabis company. The principal activities of the Company are the production, distribution and sale of a diverse range of cannabis and cannabinoid-based products for both adult-use and medical purposes under a portfolio of distinct brands in Canada. The Company delivers innovative products from owned and licensed brands, including Tweed, 7ACRES, DOJA, Deep Space, and Claybourne, as well as category defining vaporization devices by Storz & Bickel. Its segments include Canada cannabis, and Storz & Bickel. Its Canada cannabis segment includes the production, distribution, and sale of a range of cannabis, hemp, and cannabis related products in Canada. Its Storz & Bickel segment includes the production, distribution, and sale of vaporizers. In addition, it serves medical cannabis patients globally with principal operations in Canada, Europe and Australia.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Canopy Growth Faces Severe Challenges Amid Market Struggles
- Stock Price Collapse: Canopy Growth's share price plummeted by 58% in 2025 and 46% the previous year, indicating ongoing struggles in the market and severely undermining investor confidence.
- Earnings Report Expectations: The company is expected to report cannabis net revenue of CA$51 million for Q3 FY2026, a 12% increase year-over-year, but still faces challenges with profitability that could impact stock performance.
- Significant Reduction in Net Loss: Canopy Growth managed to reduce its net loss from CA$128.3 million to just CA$1.6 million, primarily due to lower impairment and restructuring expenses, indicating some financial improvement, yet ongoing scrutiny is necessary.
- High-Risk Investment: While there may be a short-term uptick in stock price following earnings, the long-term growth outlook for Canopy Growth remains bleak, having burned through over CA$88 million in operational costs over the past year, suggesting limited future growth potential.
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Functional Beverage Market Set for Explosive Growth
- Market Surge: The global functional beverage market is projected to reach $179.26 billion by 2026, driven by health-conscious consumers shifting away from high-sugar drinks, indicating a structural reset that attracts significant capital inflow.
- New Product Pilot: Doseology Sciences launched pilot production of non-nicotine, caffeine-based energy pouches in January 2026, emphasizing predictable energy delivery to meet modern consumer demands for portable, functional beverages, which is expected to enhance market competitiveness.
- Strategic Acquisition: Doseology acquired the Feed That Brain brand for $400,000, further expanding its footprint in the functional market while appointing Joseph Mimran as Strategic Advisor to bolster product development and compliance capabilities, supporting future growth.
- Industry Collaboration: Splash Beverage Group entered a joint venture with BAAD Ventures to tap into the rapidly expanding THC beverage market, leveraging both companies' distribution networks and brand-building expertise, which is expected to significantly enhance market share and supply chain efficiencies.
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