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NY Post: Big-Name Investors Dabble With Marijuana Stocks

NY Post: Big-Name Investors Dabble With Marijuana Stocks

Tuesday, 04 September 2018 10:00 AM

Shares of marijuana companies reportedly are beginning to attract a few big-name investors.

Billionaire Leon Cooperman chimed in on a recent earnings call for Green Thumb Industries, a Chicago-based grower and seller of medicinal cannabis that recently went public in Canada, the New York Post reported.

The 75-year-old hedge fund tycoon asked a few questions about pot legislation in Illinois, acquisitions in the space and the outlook in California — and revealed after the call last week that he has invested in the company, the Post explained.

“It’s a small personal investment as a result of my friendship with the CEO and his father,” Cooperman told The Post in an email.

Green Thumb chief executive Ben Kovler is a scion of the Jim Beam bourbon empire, and Cooperman is a longtime family friend.

Meanwhile, Constellation Brands, the brewer of Corona beer, recently stunned Wall Street by investing nearly $4 billion into the shares of Canopy Growth, a Canada-based pot farmer. Canopy shares soared 37 percent in a single day.

“This year has been an entire sea change in institutional attention,” Kovler told The Post, predicting the “rate of change will continue to increase.”

Meanwhile, U.S. investors are piling into an exchange-traded fund that tracks the Canadian pot industry as the country moves toward legalization and liquor producers show growing interest in selling pot, Bloomberg reported.

The U.S.-listed $436 million ETFMG Alternative Harvest ETF, known by its ticker MJ, has taken in about $22 million in August, putting it on track for the largest monthly inflow since February. That asset growth has been fueled by a 35 percent surge in the fund’s price since Aug. 14.

Pot stocks have been soaring amid Canada’s pending legalization of recreational cannabis on Oct. 17 and growing speculation that other industries will buy in. For example, Tilray Inc., a Canadian marijuana pharmaceutical maker, has more than tripled since it started trading on July 18.

A major boost for cannabis shares came two weeks ago, when alcohol giant Constellation Brands Inc. invested $3.8 billion in Canadian marijuana maker Canopy Growth Corp., the biggest deal yet in the burgeoning industry. Since the move was announced on Aug. 15, the BI Canada Cannabis Competitive Peers index has gained more than 30 percent, including 3.7 percent Wednesday.

“This reinforces the interest among large consumer companies in partnering with cannabis producers,” said Bloomberg Intelligence analyst Kenneth Shea. “It also signifies the confidence that consumer companies have for the continued rise in consumer demand for legal cannabis-infused beverages in Canada, but also eventually in the U.S. and in international markets.”

BNN Bloomberg TV reported that the global liquor giant Diageo Plc is seeking a cannabis partner, raising market speculation over who that may be. Molson Coors Canada Inc. also announced a joint venture with Hydropothecary Corp. to develop non-alcoholic, cannabis-infused beverages.

However, while the U.S.-listed fund is going strong, a Canada-listed counterpart is struggling. The $703 billion Horizons Marijuana Life Sciences Index ETF, ticker HMMJ, is on track for its biggest month of outflows since it began trading in April 2017, with $6.1 million leaving the fund this month, including $5.1 million on Tuesday alone.

Material from Bloomberg, Reuters and the Associated Press were used in this report.

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Shares of marijuana companies reportedly are beginning to attract a few big-name investors.
investors, marijuana, stocks, pot
Tuesday, 04 September 2018 10:00 AM
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