Shares of Canadian marijuana company Canopy Growth (CGC -2.43%) have rocketed more than 25% higher so far this week as of Friday morning, according to data provided by S&P Global Market Intelligence. The big jump came after a company announcement, but there has also been positive macro news from the sector.
Canopy Growth shares spiked on Tuesday on news the company was accelerating its push into the U.S. cannabis market and establishing a new holding company to drive that. That should help the company take advantage of that huge market, should federal legalization occur. And there is growing momentum for that to happen, according to new poll results released this week.
Results from a Monmouth University poll announced Monday showed that 68% of Americans believe it should be legal to possess small amounts of marijuana for personal use. A slightly higher majority support President Joe Biden issuing pardons for those convicted on federal charges for simple marijuana possession.
Many states have already acted to legalize recreational marijuana, with the issue appearing on the ballots of another five states in next month's elections. Nearly half of all states will have legalized it if those five measures pass. That, along with the support for federal legalization, helps explain why investors cheered Canopy Growth's push into the U.S. market.
Canopy USA will be a U.S.-based holding company with interests in several domestic businesses in the cannabis sector. That includes investments in multi-state operator Acreage, cannabis edibles brand Wana, and California-based extract company Jetty. Canopy would like to synchronize its Canadian operations with its U.S. businesses. That would only happen if cannabis were legalized fully in the U.S. But investors think the company did the right thing setting itself up for it this week.