The first pot stock debuted on public markets five years ago. Issued by Tweed Inc., the stock raised just a few eyebrows amidst a nascent cannabis industry that remained largely overlooked at the time. Fast forward five years and the company, now known as Canopy Growth Corp. (TSX:WEED)(NYSE:CGC), is worth nearly $15 billion. Since first being listed on Toronto’s TSX Venture Exchange on April 4, 2014, its shares have risen 2,139% as of Thursday morning, according to Bloomberg.
Over that period, the company has been a trailblazer on public markets for the cannabis industry, becoming the first marijuana company to hit a number of stock-exchange milestones.
How Investors Are Getting High on Canopy Growth
- Over 2,100% gain in 5 years;
- $15 billion market value today;
- First marijuana company to hit $1 billion market value;
- First marijuana company to list on the Toronto Stock Exchange;
- First pot stock to list on the New York Stock Exchange.
What It Means for Investors
Canopy also became the first pot company to secure a major investment from a partner outside the industry, Constellation Brands Inc. (STZ). Canopy received C$245 million from the international beverage producer in October 2017 and an additional C$5 billion in August 2018. Now, a host of other marijuana companies are receiving investments from major partners outside the industry.
Cronos Group Inc. (CRON) recently closed a C$2.4 billion investment from Altria Group Inc. (MO), a tobacco firm. Other key beverage producers, like Anheuser-Busch InBev SA and Molson Coors Brewing Co. (TAP), are also getting in on the action in hopes of hedging against the potentially disruptive effects on the beer industry. Cannabis-infused beverages are set to be legalized in Canada as early as this fall, according to the The Wall Street Journal.
If pot stocks weren’t already on a tear, the legalization of recreational cannabis use in Canada last fall has given them an added boost. The ETFMG Alternative Harvest exchange-traded fund (ETF), which includes Canopy, Cronos, and Aurora Cannabis Inc. (ACB.XTSE), is up 46% year to date (YTD), as of Friday’s close.
How long the cannabis craze will continue is anyone’s guess. But considering the trend towards legalization, there are still a number of significant markets in the U.S. that have yet to open. Only 33 states have legalized marijuana for medical use and just 10 for recreational use. If the rest of the U.S. decides to jump on the weed wagon, then plenty of growth potential still remains.