Canopy Growth Corp this week became the first cannabis company to trade on the New York Stock Exchange. The NYSE listed Canopy Growth on Thursday under the ticker symbol CGC, marking a huge milestone for the cannabis industry in general.
According to analysts, Canopy Growth’s move means that the cannabis industry will become more accessible to investors, both retail and institutional, and could draw established American banks and financial institutions to the cannabis sector.
An unexpectedly chilly welcome from investors
The company’s debut in the NYSE, however, did not receive the warm reception it would have wanted from investors. Shares opened at $30.85 on Thursday but closed at $28.68, dipping more than 6%.
Experts, however, said the price was not the most significant indicator of the day but the fact of the company’s debut.
MarijuanaStocks.com’s Jason Spatafora said that Canopy Growth listing on the NYSE is, in itself, a massive event as it shines a spotlight on an industry that is still very young.
Cormark Securities analyst Jesse Pytlak explained that the move validates cannabis as a sector that’s investable and as a potentially sizable and legitimate consumer vertical. He also said that it shows a shift in market attitudes towards embracing cannabis.
Meanwhile, Canopy Growth’s CEO, Bruce Linton, admitted to being a little disappointed about the fall of shares, but he said that they did not go there for just one day of trading. There’s been institutional buying, as well as retail selling, and he likes that, Linton said.
About Canopy Growth
Canopy Growth operates in eight countries worldwide, as well as 2.4 million square feet of licensed cannabis farms. This week, the company said that it also plans to expand its farms to 5.6 million square feet by the end of the year in order to meet the demand from the Canadian recreational market following its impending legalization and the fast-growing global medical cannabis market.
In December 2016, Canopy Growth was described by the Financial Post news organization as Canada’s and one of the world’s very first premier exporters of cannabis products. Canopy Growth is currently Canada’s largest licensed cannabis producer with a market capitalization of $6.967 billion.
Earlier this year, Canopy Growth bagged another huge achievement when it entered into a major financing deal with the Bank of Montreal. This made BMO the first major bank-owned brokerage in Canada to participate in an equity financing for a cannabis firm.
Based in Smith Falls, Ontario, the multi-licensed, geographically diverse Canopy Growth has been trading on the Toronto Stock Exchange since 2014 under the ticker symbol WEED. It was the first regulated cannabis producer to list its shares in Canada, and in North America in general. Its TSE-listed shares shot up to nearly 400% over the last year and are up some 28% year to date.
Spatafora pointed out that Canopy shares traded C$216 million on the TSE on Tuesday, which is pretty much what it traded in the first two hours on the NYSE.
Not the first Canadian marijuana firm to go public on U.S. markets
Canopy Growth is not the first Canadian marijuana company to go public in the U.S. It can be recalled that in late February, Cronos Group Inc. debuted on the NASDAQ exchange.
Sean Stiefel, a portfolio manager at New York’s Navy Capital, said that New York is the most reputable market in the world and should be where one would want to be listed.
He said the a listing on the NYSE makes investors and other players more inclined to transact.
Stiefel explained that the number of large American banks that are involved in legal cannabis would increase when stocks are on the two major exchanges in the country, namely NYSE and Nasdaq.