Canopy Growth Corp., the first marijuana producer in North America to graduate to a major exchange, erased early gains on Tuesday, closing down 1.2 per cent in its first day on the Toronto Stock Exchange.
The stock, which previously traded on the junior Venture exchange, had surged 25 per cent during a three-day rally, reversing losses for the year.
"Being the first cannabis producing company in North America listed on a major exchange such as the TSX strengthens the sector," Bruce Linton, chief executive officer of Canopy, said in a statement on Monday. "The addition of Canopy Growth helps signal that the world's view of cannabis has finally shifted, starting right here in Canada."
Canopy is the first marijuana stock listed on the TSX a spokeswoman with exchange operator TMX Group Ltd. confirmed in an e-mail.
PI Financial Corp. analyst Jason Zandberg initiated coverage of Canopy on Monday, along with peers Aphria Inc., Mettrum Health Corp. and OrganiGram Holdings, with buy ratings for all four. In a report, Mr. Zandberg forecast recreational marijuana sales will begin in Canada in mid-2018, with the combined recreational and medicinal market growing to $7.4-billion ($5.6-billion U.S.) in five years.
Shares of Canopy, Aphria, OrganiGram and other peers climbed on April 20 after Health Minister Jane Philpott announced at a United Nations General Assembly special session on drugs that Canada would introduce a legalization bill the following spring.
Canopy began trading in Toronto in 2014 after completing a reverse takeover transaction and traded on TMX Group's junior Venture Exchange.
The Venture Exchange is home to smaller companies and has generally less restrictive requirements for listing. Once companies grow to meet the listing requirements for the senior market, they have the option to graduate to the TSX. One in five companies in the benchmark S&P/TSX Composite Index are graduates of the Venture exchange, according to TMX Group.
Last month, Canada Prime Minister Justin Trudeau's government set up a task force to study how to move ahead with legalization. The group is scheduled to present its report to cabinet in November.