If Bruce Linton has any hard feelings about how he was dumped by Canopy Growth (CGC -0.30%), he's not showing it. Immediately after being fired last month as co-CEO of the company he founded, Linton listed Canopy as a top cannabis stock to invest in.   

And while some bashed Canopy Growth for its horrible fiscal 2020 first-quarter results announced last week, Bruce Linton wasn't one of them. Instead, Linton told BNN Bloomberg via email that he was buying even more shares of Canopy to add to his already large position. Why does Canopy Growth's ousted former CEO remain so bullish about the stock?

Hands holding cash and a cannabis leaf

Image source: Getty Images.

Looking at the big picture

Canopy Growth posted revenue that was much lower than anyone expected in its fiscal first quarter. The company recorded minimal sales of cannabis oils and softgels after reporting $36.5 million Canadian for the product categories in the previous quarter.

The issue was that Canopy Growth appears to have already shipped more oil and softgel products than the market can handle. Canopy even adjusted its revenue for the first quarter down by CA$8 million in anticipation of future product returns. 

This sounds like a case of inept management or perhaps intentional channel stuffing. Either way, Bruce Linton was at the helm of Canopy Growth during the previous quarters when the decisions were made to ship high levels of oils and softgels.

Despite the current woes for Canopy Growth, Linton is looking at the big picture. He stated in his email to BNN Bloomberg that his former company "continues to execute on the emerging opportunity for increasingly sophisticated global and national recreational and medical products." He added, "This is a vision and dedication exercise that is designed to reward shareholders over a huge and rapidly emerging market."

There's no question that Bruce Linton has long been one of the loudest cheerleaders for the cannabis industry. This is the guy that once predicted that Canopy Growth would disrupt four different multibillion-dollar industries. Linton still thinks the global cannabis market will be huge. And he continues to believe that Canopy Growth sits in the driver's seat.

August buying opportunity?

Linton also told BNN Bloomberg that "August has always been a buying opportunity." He said that he has bought Canopy Growth shares during the latest "August sale."

What did Linton mean by these comments? It's certainly not true that Canopy Growth always pulls back during the month of August. In August of 2015, the stock did fall by 16%. However, the next year, shares jumped 24% early in August and finished the month up 13%. In 2017, Canopy Growth's share price ended the month of August pretty much where it started the month. And last year, the stock skyrocketed 77% during August.

Linton could have been making the point that Canopy Growth's share price has ended the year higher than its price midway through August in the past. That happened in 2015, 2016, and 2017, with shares soaring 50%, 127%, and 238%, respectively. But last year, Canopy's share price was 16% lower at the end of the year than it was in the middle of August.

It's probably best for investors to take Linton's comments about August with a grain of salt. After all, we're talking about a man who owns close to 2.5 million shares of Canopy Growth. He has plenty of motivation to encourage other investors to buy shares by saying that August is a buying opportunity.

Follow Linton's lead?

No investor should scoop up shares of Canopy Growth just because its former CEO says that he's doing so. However, it is a good idea to do follow Bruce Linton's lead in looking at the big picture. If the global cannabis market grows even close to what many predict it will and Canopy Growth retains its leadership position in the industry, the stock has a lot of room to run.

On the other hand, the U.S. makes up a large chunk of the global cannabis market, and the odds of federal marijuana laws changing in a way that would allow Canopy Growth to enter the U.S. market remain quite low because of the political dynamics at play. Without the U.S. in the mix, Canopy Growth's growth prospects are much smaller than they'd otherwise be.

Canopy Growth's oil and softgel products fiasco could cause some investors to question whether or not the company will be able to maintain its position atop the industry. However, the company is searching for a new CEO. Also, Canopy's big partner, Constellation Brands, isn't likely to tolerate such miscues in the future.

My view is that Bruce Linton is right that the big picture continues to look positive for Canopy Growth and that the sell-off in August presents a buying opportunity for long-term investors. I also think that Linton himself is a big part of why the company's prospects are good -- and why the company stumbled so much that the stock is on sale this month.