Shares of Canopy Growth (CGC 0.07%) were jumping 7.2% higher as of 3:29 p.m. EST on Thursday. The gain came after Mexico's lower congressional house approved a bill that would decriminalize marijuana. Also, New York Assembly Majority Leader Crystal Peoples-Stokes told The Buffalo News that state legislators are close to negotiating a deal with New York Gov. Andrew Cuomo to legalize recreational marijuana in the state.
Both of these latest developments could bode well for Canopy Growth. Mexico would be one of the biggest legal cannabis markets in the world, and New York would be one of the largest legal cannabis markets in the U.S.
It's too soon to celebrate, though. The Mexican Senate hasn't voted on the marijuana bill yet, and New York legislators still haven't finalized the details on a compromise to legalize recreational pot in the state.
More importantly, Canopy Growth wouldn't be able to enter the New York cannabis market and keep its shares listed on a major U.S. stock exchange even if the state legalizes adult-use marijuana. As long as cannabis isn't legal at the federal level in the U.S., Canopy will have to stay away from the lucrative market.
Investors will obviously want to keep their eyes on the progress of marijuana decriminalization in Mexico as well as recreational cannabis legalization efforts in New York State. Probably the biggest thing to watch, however, is the effort to decriminalize pot at the federal level in the U.S. Canopy Growth is arguably the best-positioned Canadian cannabis producer to expand into the U.S. cannabis market once it's legally able to do so.