Canada: Marijuana millionaires riding legalization wave

As Canada moves to legalize recreational pot, the value of the nascent market has ballooned to more than C$25 billion, swelling the ranks of affluent pot investors who have significant holdings in companies such as Canopy Growth Corp. and Aphria Inc. The U.S. legal market is expected to reach $75 billion in sales by 2030, almost as large as North America’s soft drink market, according to research firm Cowen & Co. Canadian sales could soon be worth between C$7 billion and C$12 billion a year, Beacon Securities estimates.

Even after a recent sell-off, many marijuana-related stocks have more than doubled in the last year. Never mind that recreational marijuana won’t be legal until later this year, and some publicly-traded companies have yet to make a sale.

Stocks snapped the recent slump Thursday. Canopy Growth rose as much as 6.8 percent and was up 1.7 percent to C$28.11 at 9:53 a.m. in Toronto. Aurora Cannabis surged as much as 7.5 percent and Aphria gained 7.4 percent.

“Insiders have created a huge amount of wealth for themselves and even early investors,” PI Financial analyst Jason Zandberg said in a telephone interview. “It reminds me of back in the dot com days. You always heard of a friend of a friend who got in early and got their company bought out.”

Read more at Bloomberg (Jen Skerritt)