Marijuana investors have jumped into cannabis stocks, embracing the vision of a more pot-friendly world and looking forward to serving a fast-growing consumer market. Canada's legalization of recreational cannabis sales has highlighted companies that do business there, but smart Canadian companies know that there's a lot of investment capital that won't make the trip north of the border.

That's the key reason Aurora Cannabis (NASDAQ:ACB) chose to have its shares made more readily available to U.S. investors. By listing itself on the New York Stock Exchange, Aurora Cannabis sought to make it easier for marijuana investors -- both individual and institutional -- to take stakes in the growing company.

Aurora Cannabis had its first day of trading on the NYSE yesterday, Oct. 23, and in the eyes of many, it was a disappointment. But even though the share price didn't behave the way many had hoped it would, what marijuana investors should take away from the debut was that interest in the budding industry is still strong.

Marijuana leaf on top of a pile of $100 bills.

Image source: Getty Images.

A big drop on day 1

The main takeaway that most marijuana investors focused on was the fact that Aurora Cannabis shares dropped significantly in their first day of U.S. trading. With over-the-counter trading in the stock having closed the previous day at $8.69 per share, Aurora opened almost $1 per share lower Tuesday morning. Even as the overall stock market regained ground, the cannabis company couldn't sustain any upward price move, and shares closed the day at $7.70, down more than 11%.

That downward move flew in the face of the hopes of many investors, who had looked for an IPO-like pop in the stock price. Yet there are several reasons to explain the drop:

  • The overall stock market suffered a substantial decline in the morning of Aurora's first day on the NYSE, with the Dow dropping about 550 points before recovering later in the day.
  • Marijuana stocks overall have behaved badly since Canadian cannabis became legal on Oct. 17. Many investors attribute that decline to a "sell the news" mentality following the huge run-up in shares in the weeks leading up to the Canadian launch.
  • There was no inherent change in Aurora Cannabis' corporate structure, and the company didn't offer new shares as part of its NYSE debut. With most institutional investors having ready access to Aurora shares on the Toronto Stock Exchange, the potential impact of the NYSE listing was less than many had expected.

Given the sluggish opening, it's tempting to write off the Aurora Cannabis debut as a nonevent. But there were several positives even on a tough day for shareholders.

The silver lining for marijuana stocks

Perhaps the biggest indicator of success for Aurora Cannabis was the fact that the volume of trading was high. Nearly 40 million Aurora Cannabis shares traded on the NYSE on Tuesday, and that was well above the 8 million share average that the stock had seen on the over-the-counter market. Trading activity on Canadian exchanges was also strong, with 75 million shares changing hands, more than double the typical volume. That shows that interest in cannabis stocks overall remains strong.

And there was good news for Aurora in particular. The NYSE listing gave Aurora Cannabis the impetus to make some key operational moves that should help it implement its broader strategy. That includes last week's news that the key Aurora Sky growing facility at Edmonton International Airport had gained approval for sales from regulators at Health Canada, as well as decisions to simplify Aurora's capital structure and sell off some of its interest in Green Organic Dutchman Holdings.

Don't touch that dial

There's still plenty of uncertainty surrounding the cannabis industry and whether Aurora Cannabis will be able to take on a key leadership role in the development of the sector. But listing on the NYSE was an important moment in Aurora Cannabis' history, and the move should open some new doors for the marijuana company to consider in the years to come. Rather than being disappointed, shareholders should be happy that the company has passed another milestone and is poised to take full advantage of the opportunities in the global cannabis market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.