Canada-based Canopy Growth (CGC 2.34%) is one of the largest publicly traded pot producers. However, despite this, the company has remained consistently unprofitable.
A big reason for this has to do with Canopy's inability to enter the U.S. market, based on current federal laws. There was some progress in this area last December, sparking a short-lived rally in Canopy and similar stocks.
Since then, however, excitement about this catalyst has dwindled. Marijuana stocks have pulled back. During the third quarter, some of Wall Street's smartest investors bought Canopy, ahead of the legalization rally.
Whether they've decided to hold on or not may help determine the best course of action from here.
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Big-name hedge funds stocked up on Canopy ahead of Q4 2025
Based on the latest available SEC 13-F filings, it wasn't traditional asset managers, such as mutual and exchange-traded fund (ETF) management companies, that accumulated Canopy during the third quarter. Rather, the largest net buyers of Canopy stock during the quarter were some of the largest quantitative trading companies and hedge funds.
These include Susquehanna International Group, which increased its position by around 2.75 million shares during Q3 2025. Other quantitative traders, including Citadel, Millennium Management, and D.E. Shaw, purchased 2.7 million, 2.1 million, and 1.9 million shares, respectively.
NASDAQ: CGC
Key Data Points
Shares are trending lower, but the next move remains unclear
After range-bound price action for much of the fall, Canopy zoomed higher in December. That's when President Donald Trump issued an executive order, calling on the Department of Justice to "take all necessary steps" related to "rescheduling marijuana to Schedule III."
While rescheduling to Schedule III wouldn't mean full-on U.S. federal legalization, it represents significant progress toward that goal. Shares have sold off since this announcement.
It's unclear whether these institutional buyers joined in on the selling, or have capitalized on the situation by increasing positions. Next month, following the next round of 13-F filings, we'll have a better idea. Until then, consider it best to stick to the sidelines.
