The stock market did very well on Friday morning, with investors responding to further positive news on the U.S.-China trade front. As of 11:30 a.m. EST, the Dow Jones Industrial Average (^DJI 0.61%) was up 330 points to 25,769. Among other major indexes, the S&P 500 (^GSPC 1.04%) was up 21 points to 2,767, while the Nasdaq Composite (^IXIC 1.37%) picked up 23 points to 7,450.

Marijuana stocks have gotten a lot of attention recently, due largely to the impressive comeback their share prices have enjoyed following a lackluster 2018. One of the biggest stocks in the industry, Canopy Growth (CGC 11.72%), reported strong financial results late last night, while pot peer Aphria (APHA) came out with some news that encouraged shareholders in the smaller Canadian cannabis company.

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

Image source: Getty Images.

On a high

Shares of Canopy Growth picked up 3% Friday morning as investors reacted favorably to its latest quarterly report. The company reported an amazing 283% jump in revenue during the quarter that ended on Dec. 31 compared to the same period in 2017. The extra sales stemmed from the opening of the recreational cannabis market in Canada, for which Canopy was well-prepared. The cannabis producer managed to boost its sales volumes to more than 10,000 kilograms during the quarter, ramping up impressively to meet the huge demand among Canadian consumers.

Canopy has captured investors' attention for a couple of reasons. The first is that it's gotten major investment support from beer and spirits company Constellation Brands, which made a $4 billion capital injection in late 2018 that gave the beverage giant a 38% stake in Canopy. The other is that Canopy was one of the first companies to list its shares on major U.S. stock exchanges, and that's gotten it the exposure to the investor community on both sides of the U.S.-Canada border that it needs in order to maximize its growth potential.

At this point, Canopy's strategic vision includes continuing to expand in Canada, taking advantage of the recent legalization of hemp in the U.S., and finding new markets internationally. That combination is firing on all cylinders, and many investors are optimistic about Canopy's prospects.

Check out the latest Canopy Growth earnings call transcript.

Aphria finishes its review

Elsewhere in the cannabis industry, Aphria shares were higher by 3% after the company reported that it had completed a special committee review. Some critics had alleged that Aphria's acquisition of LATAM Holdings was improper, arguing that Aphria paid too much for the stakes in three marijuana businesses located in Colombia, Argentina, and Jamaica. Complicating matters were assertions that Aphria insiders held financial stakes in the previous owner of those three businesses, SOL Global Investments. Critics argued that the positions that CEO Vic Neufield and co-founders Cole Cacciavillani and John Cervini held in SOL presented a conflict of interest. Aphria argued against the allegations but named a special committee to investigate them.

The committee's review found that the assets purchased were legitimate business assets and that the price paid was "within an acceptable range as compared to similar acquisitions by competitors, be it near the top of the range of observable valuation metrics." With the decision of Neufeld and Cacciavillani to retire from their executive roles effective March 1, interim CEO Irwin Simon is confident that Aphria will be able to move forward with new and stronger governance policies in place.

Be careful with cannabis investing

Marijuana stocks are all the rage, and there are indeed ways to profit from the industry. But with so much business activity going on, you have to keep up to date on the latest events in order to avoid nasty surprises. Even then, there are risks like the allegations that Aphria had to address that investors have to be aware of before buying shares of cannabis companies.