Funds from funds
With the inclusion in the S&P/TSX 60 Index, Canopy Growth (WEED) now becomes open to funds that are only focused on index investing as a strategy. These funds include pension funds, mutual funds, and other such funds that are designed to track indexes, often referred to as passive investment management. The size of some of these funds such as a pension fund can be huge and usually would mean that Canopy Growth could raise more capital quickly if it desires, which puts the company at a significant advantage to its peers Aphria (APHA), CannTrust (CTST), and Aurora Cannabis (ACB).
April has dampened cannabis sector stock investors’ moods. However, slowly and steadily, companies such as Canopy Growth are becoming fundamentally stronger. The addition to the S&P/TSX 60 certainly lifts cannabis investors’ (MJ) sentiments in April.
In its press announcement, the company’s founder, chair, and co-CEO, Bruce Linton, stated, “First traded on the TSX Venture Exchange on April 4, 2014, I cannot think of a better way to celebrate our 5th year anniversary as a publicly traded company, than being added to the TSX’s large-cap index.”
Canopy Growth was trading higher by about 5% on both the US and the Canadian markets.