Canopy Growth is big in Canada and, technically, at $5 billion in market capitalization, the legal marijuana industry’s first unicorn is big everywhere.
But it’s one thing to be big on the Toronto Stock Exchange, where Canopy and its other Health Canada-licensed competitors are traded (Canopy scored the ticker symbol WEED). It’s another thing to be big on Wall Street, which is where Canopy is pushing to be listed before the end of the month on the New York Stock Exchange, the company announced this week.
If NYSE says yes, Canopy would be traded under the ticker CGC and would be the first marijuana producer to be listed on the world’s largest stock exchange — though not the first cannabis company. And, firsties-purists will note that another Canadian firm, Cronos Group, is already listed on NASDAQ. Whatever. This is Canopy’s story.
Brought into the world as Tweed, Canopy Growth became the marijuana industry’s first-ever legitimate billion-dollar company in November 2016, during the flurry of investor activity that followed four U.S. states — including Canada-sized (population-wise) California — legalizing recreational marijuana at the polls. (Full disclosure: I own some Canopy shares.)
Since then, Canopy’s value has see-sawed a bit, but has mostly gained — and gained quite a bit. Shares in Canopy were trading around $25 on Wednesday evening, according to MarketWatch, a valuation that owes much to investors’ hopes for Canada’s own recreational marijuana era, which is set to begin later this year.
Ahead of that big reckoning, and following a major investment in the company by beer-maker Constellation Brands, Canopy brass are taking their show to the big city. In an interview with Bloomberg, Canopy CEO Bruce Linton said the listing would improve his firm’s chances of drawing interest from the biggest of all sources of capital: major institutional investors.
“One of the primary drivers of this listing is, as we are expanding globally, having U.S. institutional investors helps,” he told Bloomberg. “I think the investment community has to drop the pot jokes and talk about the investment grade opportunity.”
Whether Canopy gets the nod or not is all up to the NYSE, which so far hasn’t indicated whether or not it will approve the company’s application. Given the facts that Canopy operates primarily in Canada, breaks no laws there or anywhere else (the company is involved in international exports of cannabis, under the purview of Health Canada) and is a legitimate company and not, say, a penny stock, there doesn’t seem to be any reasons why it wouldn’t.
Canopy’s announcement is just one of a cavalcade of big-time marijuana industry money deals this week. On Monday, Aurora Cannabis, one of Canopy’s main competitors, announced a $2.5 billion all-stock acquisition of MedReleaf.
As Investors.com noted, these deals are part of a general movement towards consolidation ahead of Canada’s legal market — a situation not yet replicated in America, “thanks” to federal prohibition.
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