Canadian medical cannabis grower added to key stock index

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The Canadian cannabis industry has taken another leap toward the mainstream now that Canopy Growth Corp. is being added to the influential S&P/TSX Composite Index.

Canopy, one of Canada’s federally licensed medical marijuana cultivators, will be the country’s first cannabis company to be included in the index’s health care sector, The Globe & Mail reported.

The company, which trades on the Toronto Stock Exchange, will be added to the index prior to the start of trading next Monday.

Institutional investors and index funds rely on the S&P/TSX index when deciding which stocks to purchase, according to the newspaper. Canopy’s inclusion could spur additional purchases of the company’s shares – and perhaps those of other cannabis companies.

Canopy, based in Smiths Falls, Ontario, has traded on the Toronto Stock Exchange since July 2016. It has used the ticker symbol WEED since Feb. 1.

Canopy’s listing on the Toronto Stock Exchange is one of the criteria a company must meet to be considered for the S&P/TSX index, The Globe & Mail reported. In addition to trading on the index for six full months, companies must meet requirements for liquidity and market capitalization.