Canopy Growth (CGC) (WEED) has become the face of the cannabis industry as more and more analysts and investors take the sector more seriously. Just yesterday, Bank of America Merrill Lynch initiated its coverage on Canopy Growth with a “buy” rating.
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Stock moved sideways
While the stock continues to get positive coverage, it has largely moved sideways since February. While the company’s YTD return of 59% has outperformed the benchmark ETF Horizons Marijuana Life Sciences ETF’s (HMMJ) return of 40%, peers Aurora Cannabis (ACB) and HEXO (HEXO) have outperformed Canopy Growth with YTD returns of 76% and 86%, respectively.
Yesterday, the stock rallied in the aftermarket hours as several media outlets reported that the company was in talks with Acreage Holdings to acquire the latter. With Acreage Holdings, Canopy Growth could make a further foray into the US market, which is yet to legalize marijuana.
On April 12, Canopy Growth announced that it would be the first cannabis company to join the S&P/TSX 60 Index. Inclusion in this index is significant because it means Canopy Growth is now open to funds that are only focused on index investing as a strategy, which means more access to capital for the company.