Canopy Growth’s S&P/TSX 60 Win a Major Milestone for CGC Stock & Marijuana Stocks Everywhere

Canopy Growth S&PTSX 60 Win Major Milestone for CGC Stock...and the Whole Pot Industry

Canopy Growth Joins S&P/TSX 60

In another huge victory for the industry-leading Canopy Growth Corp (NYSE:CGC), Canopy will now join the S&P/TSX 60 and will be the first marijuana company to be added to the Canadian index of large-cap stocks. CGC stock climbed after the news, and I think that’s just the beginning for its gains.

CGC stock has already had a fantastic start to 2019. Share value has gone up over 50% year-to-date, and in that climb, it has hit many major milestones—the S&P/TSX 60 being only the latest one. (Source: “Canopy Growth is about to become the first pot stock to join S&P/TSX 60 index,Financial Post, April 12, 2019.)

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Canopy announced its intention to enter the U.S. market via cannabidiol (CBD) a few months ago, another move likely to yield huge wins for the company.

On top of that move, banks and analysts have begun to warm up to the industry titan, with many coming out in 2019 predicting higher prices for CGC stock.

The company also made its presence felt at Davos during the World Economic Forum, part of the first ever cannabis talk among the world’s elite.

It’s the largest marijuana company in the world by valuation, with a U.S. listing and a Big Alcohol partnership with Constellation Brands, Inc. (NYSE:STZ).

All this combines to make CGC stock one of my top picks, and also helped smooth its entry into the exclusive Canadian index.

And best yet, this news couldn’t come at a better time.

Canopy had recently hit a rare rough patch after analysts at a major Canadian bank lowered their revenue projections for Canopy’s next quarter by 26%.

“We see street estimates being far too high, which we expect to result in large earnings misses next quarter,” said Bank of Nova Scotia (NYSE:BNS) analysts. (Source: “Canopy Growth heading for ‘large earnings misses next quarter’: Scotiabank,” Yahoo! Finance, April 11, 2019.)

The news of its addition to the S&P/TSX 60 will certainly serve to offset that dip. So I’m still very bullish on CGC stock (and also the marijuana industry at large).

What This Means for Pot Stocks

Aside from the clear benefit to CGC stock, this addition will resonate throughout the marijuana industry.

Like most emerging industries before it, cannabis still needs to mature. Part of that maturation process is validation in the eyes of the gatekeepers. In this case, the index represents a huge win for cannabis and a huge vote of confidence for the industry.

Shifting from an illicit to a legal business has not always been smooth, but there’s no doubt that cannabis has made heavy progress in 2019.

Between its position at Davos and its ever-growing presence on American exchanges to its increasing legality worldwide, cannabis is going mainstream.

This is just another example of markets becoming more comfortable with the cannabis industry more broadly.

As such, expect other marijuana stocks to follow in Canopy Growth’s impressive path.

Analyst Take

Canopy Growth stock continues to impress in 2019 with another milestone.

I expect that both CGC stock and the legal marijuana industry more broadly will continue their winning ways throughout 2019.