1st Marijuana Company to List on NYSE

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1st Marijuana Company to List on NYSE

The first publicly traded, federally regulated cannabis company in North America listed on the New York Stock Exchange just this past Thursday: Canopy Growth. This is a notable development given investors’ mostly cautious approach to the industry as the drug is still illegal federally in the US. Over the past few years, however, the marijuana market has continued to build momentum as more states (now a total of 9 & DC) have legalized retail use.

We started tracking the US legal recreational marijuana industry when stores were first able to sell retail cannabis in Colorado and Washington in 2014. We’ve always believed in the industry’s tremendous growth potential, which is why regularly highlight its progress. While we are not necessarily recommending investing in marijuana companies, we maintain that it is important to keep on your radar given the market’s size and potential impact on other industries.

Therefore, we wanted to give some background on Canopy Growth, which is the second Canadian marijuana company to list in the US after Cronos Group did so on the Nasdaq this past February. Here’s a rundown:

  • It was founded in Canada in 2014 and is now one of the largest marijuana producers by market value in the world.
  • The company serves the legal medical marijuana market in its home country and globally. It has operations in 5 continents, most recently entering the African market by acquiring Daddy Cann Lesotho (which has a license to cultivate, manufacture, supply, hold, import, export and transport cannabis and its resin).
  • It offers a range of products, including dried flower, oil/concentrates (cannabis extracts), softgel capsules and hemp.
  • It has grown through acquisitions and has partnered with some well-known brands, including Snoop Dogg and spirits company Constellation Brands (which took nearly a 10% stake in the company last year).
  • The company operates 7 cannabis production sites with over 665,000 square feet of production capacity.

Overall, the company currently has a market cap of +$6 billion. To see how it stacks up financially, here’s some highlights of its latest quarterly financial results from its fiscal third quarter (ended December 31, 2017):

  • Record quarterly revenue of $21.7 million or a 123% y/y rise, helped by increases in domestic/international sales and higher prices.
  • 69,000 active registered patients, representing growth of 138% y/y.
  • Sold a record 2,330 kilograms of marijuana at an average sales price of $8.30 per gram, an increase of 87% y/y and 13% y/y respectively.
  • “Approximately $400 million cash on hand to fund domestic and global expansion”.
  • Press release here.

Moreover, the company is also poised for another tailwind as Canada is expected to nationalize recreational marijuana later this summer. Aside from even more growth potential in Canada, the company is clear on its website that it wants to “be the number one cannabis company in the world”, as its latest acquisition helps demonstrate.

To end, here’s where you can find the company listed:

  • Also the first cannabis company included in the S&P/TSX Composite Index.