In anticipation of July's legalization, Bloomberg reports Canadian marijuana stocks are soaring. In particular, the biggest growth is being seen among companies that the market associates with recreation rather than medical use. Many predict that alcohol companies will begin investing more heavily in the recreational cannabis market, a trend that has already begun to materialize with Constellation Brands' purchase of a minority stake in Canopy, the world's largest publicly traded marijuana company, and, critically, one listed on the Toronto Stock Exchange.
This sort of meteoric rise was easily predictable ever since the announcement of Canadian legalization, but it still may be worth caution. While there is certainly a lot of money to be made in Canada, it's possible that investors are becoming too easily excited by the prospect of North America's first nationwide legalization. That said, if investors' expectations come true, the Canadian legalization presents a great opportunity to get in on the ground floor of the continent's first completely legal recreational marijuana market.
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