In an echo of Prohibition, when Canadian companies such as Seagram Co. flourished, Canada’s stock exchanges have become the go-to for American cannabis companies. The country’s investment bankers do most of the industry’s deals, and Canada has developed some of the most advanced technology and the largest growing operations.
Today, the country boasts about 135 publicly traded companies with a combined market value of more than C$60 billion ($46.1 billon), including dozens of U.S.-focused producers that can’t legally list in their home country.
“We’re the godfather of legal cannabis,” says Cam Battley, chief corporate officer at Aurora Cannabis. “This is a very unusual situation in that you’re going to see a handful of leading Canadian companies define the birth of a global industry.”
In August, Canopy Growth Corp., the second-largest cannabis company with a market value of more than C$14 billion announced the industry’s biggest deal yet, with a $3.8 billion investment from Corona beer maker Constellation Brands Inc., initiating a stock rally across the sector. Canopy is already the biggest licensed producer in Canada, with 4.3 million square feet of growing space and more than a third of the country’s disclosed supply contracts for recreational pot. It plans to enter the U.S. market as soon as cannabis becomes federally legal, Chief Executive Bruce Linton has said.
Investment bankers at smaller Canadian firms have ridden the wave of investor mania that’s generated comparisons to the dot-com bubble. Canaccord Genuity Group Inc., which made its name in the mining and energy sectors, now says cannabis is its largest Canadian business. “If you’re looking for federal buy-in and federal support, Canada is really the only place to be,” says Graham Saunders, head of origination at Canaccord.
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