Canadian cannabis stocks rocketed upwards on Wednesday as investors reacted to a host of news, notably the fact that Constellation Brands (NYSE:STZ) will spend C$5bln to boost its stake in Canopy Growth Corp (CSE:WEED), sending shares up 31.3% at C$42.20.
Other significant players in the market, including Aurora Cannabis Inc. (TSE:ACB:CA) were up 19.5%, at C$6.38. Aphria Inc. (TSE:APH:CA) was up 20.5%, at C$10.51. Hiku Brands (CSE:HIKU) was up 30.1% at C$1.90.
In the case of Canopy Growth, Constellation Brands, the New York-based beverage company, announced it will spend about C$5 billion (US$3.8 billion) to boost its stake in Canopy Growth, in a bet that legalization will gain traction around the world. Constellation said that it would buy 104.5 million Canopy shares priced at C$48.60 each, marking a significant premium over Tuesday’s closing price of C$32.15.
“This is rocket fuel,” said chief executive officer Bruce Linton, of Canopy in an earnings calls on Wednesday. “We’re going to be way more global.”
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In the case of Aphria, Perennial Inc., a subsidiary of Data Communications Management Corp., and Aphria have signed a letter of intent to establish a joint venture to develop new, consumer-centric cannabis products and brands for the Canadian adult-use market.
For Aurora, news that its acquisition of Anandia Laboratories Inc. is now complete helped bolster the stock.
The Horizons Marijuana Life Sciences Exchange Traded Fund, a group of marijuana stocks that trades on the Toronto Stock Exchange, rose 9%, to C$15.90.
The market movements point to an emerging trend in the Canadian cannabis space, where investors appear to have increased confidence in the cannabis sector, despite significant ups and downs in recent months.