Expansion into U.S. pot market is key area for Canadian marijuana producer Canopy growth (NASDAQ: CGC). The company was working on deals to enter the United States long before its peers explored the opportunity. In 2019, he signed a still-ongoing agreement with a multi-state operator Area of ​​assets to accelerate its growth in the market, but this deal will only happen if and when the United States opens up for business through federal legalization.

This month, Canopy Growth announced another move to America. But this deal doesn’t have to wait for marijuana legalization.

Canopy Growth launches CBD vapes in the United States

On September 14, Canopy Growth announced the launch of its very first cannabidiol (CBD) vape product, whisl. The product has options that allow users to control the desired effect whether to focus, relax or unwind.

How can Canopy Growth do this, since marijuana is federally illegal in the United States? These products do not contain tetrahydrocannabinol (THC), the psychoactive component of cannabis. Although CBD is not entirely legal, it is allowed as long as it is derived from a hemp plant, which is the case with these vape products. In 2018, the United States legalized hemp products under the Farm Bill.

The press release contained even more promising news: Canopy Growth will sell these products in more than 3,000 Circle K stores in the United States in partnership with the global convenience store giant. Couche-Tard Food (OTC: ANCU.F). This chain is no stranger to cannabis, as Couche-Tard has a nearly 20% stake in the marijuana retailer Fire flower, which has stores across Canada.

Paving the way for bigger gains

The hemp-based CBD market is legal, but it is not a significant growth opportunity, nor a new business unit for the company. Canopy Growth currently includes sales of all revenues it derives from the segment (including all sales it makes in the United States) in its “international and other†line.

In its most recent results, for the period ending June 30, that line totaled only C $ 19.4 million and was down 8% year-over-year. It represented just over 14% of its net sales of C $ 136.2 million. However, this also includes sales of medical marijuana in international markets. If hemp-based CBD products were a significant portion of the revenue, Canopy Growth likely would have separated it. The launch of the whisl product is unlikely to change the history of CBD.

The big picture for Canopy’s investors is the growth of distribution channels. Canopy is positioning itself to be able to quickly take advantage of the American market during federal legalization. First, with its strategic relationship with the beer maker Constellation brands, which owns nearly 40% of Canopy. Second, with its Acreage agreement pending, subject to policy change. And more recently, by creating a presence in Circle K stores.

Is Canopy Growth a buy today?

From an investment standpoint, Canopy Growth is not a great stock of marijuana in Canada. His revenue growth has been inconsistent and his high growth days are in the rearview mirror, at least until he can fully enter the US market. And that’s where the potential of this stock lies. If you are willing to wait, perhaps several years, for the United States to legalize marijuana at the federal level, then Canopy Growth could certainly be a pot stock worth buying today.

The company’s shares have fallen more than 45% this year (the Horizons Marijuana Life Sciences ETF is flat) because it was overrated for a long time and probably still is. That being said, at a price / sell multiple below 12, its valuation metric is close to other Canadian stocks in the jar.

CGC PS ratio data by YCharts

Given the relationships and partnerships he has in place, he’s arguably worth a higher premium than his peers, anyway. For long-term investors, now may be the time to consider buying shares of Canopy Growth.