Canopy seeks to become first marijuana producer traded on New York Stock Exchange

(This developing story has been updated from a previous version.)

Canada’s market leader in medical marijuana has applied to trade its shares on the New York Stock Exchange, a move that would make it the first cannabis-producing company to list on the world’s largest stock market.

Smiths Falls, Ontario-based Canopy Growth said in a news release it expects its shares to begin trading on the NYSE “before the end of May” under the symbol CGC.

Analysts say the clout that comes with a listing on the NYSE could help Canopy attract institutional capital – and will ultimately bring the medical marijuana industry within reach of more mainstream investors.

“Listing on the NYSE should significantly widen shareholder attention to Canopy,” Toronto-based Beacon Securities analyst Vahan Ajamian wrote in a research note.

Canopy will continue trading on the Toronto Stock Exchange under the ticker symbol WEED.

The company had been pursuing a listing on the Nasdaq, but CEO Bruce Linton chose the NYSE because of the additional credibility it lends the company, according to Bloomberg.

Sean Stiefel, portfolio manager at Navy Capital in New York, said a lot of American hedge funds only invest in U.S.-listed stocks, so being on the NYSE opens more doors to institutional money.

Canopy’s planned NYSE listing and Aurora’s takeover of MedReleaf, also announced today, are signs that mainstream investors on Wall St. have woken up to medical marijuana as a legitimate opportunity, he said.

“Likewise, a lot of banks that have not invested in the medical marijuana sector will have no excuse when it’s on the New York Stock Exchange,” Steifel said.

If its application is approved, Canopy would become only the second “pure play” marijuana company to list on a top American stock market.

Cronos Group, one of Canada’s largest vertically integrated marijuana companies, listed on the Nasdaq in February under the symbol CRON.

Other cannabis-related stocks trade on the NYSE – Scotts Miracle-Gro, biotech firm 22nd Century Group and Innovative Industrial Properties – but they are not plant-touching marijuana companies.

Matt Lamers can be reached at [email protected]

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2 comments on “Canopy seeks to become first marijuana producer traded on New York Stock Exchange
  1. Paul Franke MD on

    As a Cannabis investor, this is important news. I am very cautious about investing too heavily this early on simply based on my observations of the Colorado retail market.
    Just yesterday, a colleague showed me his receipt for a $100 dollar ounce of top shelf 28% THC Cannabis. There is an oversupply of excellent product here in Colorado.
    As we engage in our continuous analysis of the industry, regular reporting of the basic quantitative metrics surrounding supply vs. the retail market, will be critical.
    The reality is that with a handful of essential factors at play in the production side, it is relatively easy to produce excellent and abundant product.
    Also, it would be very useful to quantify the adequacy of supply of testing facilities. Given the restrictions on creating a viable testing facility, this aspect of the industry has significant investment potential as well.

    Reply
  2. Brett Roper on

    28% THC for $100 an ounce may be somewhat of a misnomer as there is still a price disparity based upon strain as well as cultivator sourcing … it is possible that this ounce may be of a slightly lesser quality or cultivator source or is a part of a moving longer term inventory off the shelf although I could be certainly mistaken … quality pounds are still moving on a wholesale basis between $800 and $1,000 so an $800 pound (lower end) would be a $1600 pound at retail based upon a 100% markup. Just an observation and yes, an oversupply certainly exists and will cause less efficient cultivators with mediocre product to rethink their being in the space. I would take minor exception to the statement it is relatively easy to produce excellent product, certainly not difficult to create an abundance of lower quality product.

    At the end of the day it is manufacturing 101; lowest cost producers with the best quality will likely survive as well as thrive.

    Thanks Frank!

    Reply

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