Canopy Growth’s Linton: “For sure there’s a marijuana bubble”
Canopy Growth CEO Bruce Linton told Yahoo Finance’s Midday Movers on Wednesday that marijuana stocks are in a bubble. Linton’s comments follow Canopy’s worst quarter in three years, where the company failed to meet analyst expectations which snowballed into a 13 percent drop in market value Wednesday as well.
Still, Canopy Growth is up 30 percent overall for the year, placing the company in a good position to outlast any bubble, according to what Linton said on Midday Movers.
“For sure there’s a marijuana bubble,” he said on the show on Wednesday. “I don’t know somebody who’s not talking about it. And I don’t know somebody who isn’t putting out a press release that says they’re in the business. And when they put the press release out, their company is worth half a billion dollars.”
Linton also argued that Canopy’s partnership with beverage maker Constellation Brands would help the company avoid any missteps in the future.
“We have about four-and-a-half million square feet of production in Canada,” Linton said on the show. “[Constellation Brands (STZ)] invested $4 billion U.S. in us after working with us for two years and getting to know us very well. So I would say there are very good companies inside the bubble, not dissimilar to how probably Google was perceived in that bubble.”
US cannabis industry to remain static for now
Linton also commented on the state of the U.S. cannabis industry, stating that he doesn’t think too much will change in the near-term, even if something dramatic should happen such as a repeal on the federal prohibition of the drug. Earlier this month, President Donald Trump asked attorney general Jeff Sessions to resign, prompting some in the industry to speculate on the future of cannabis in the U.S.
“It seems that there’s an awful lot of interest now state-by-state,” Linton said in reference to the situation in the U.S. “So it doesn’t look to me like there’s going to be a big appetite for interstate commerce. If there was going to be interstate commerce because it became federally legal, I’m not sure that the opportunities that exist in a lot of these states that have it for production and conversion would exist there, because it’s not economically practical to do large-scale production where you have very high land costs or very limited water rights. I think it will end up being a patchwork, which is fine with us.”