Article by Greg Quinn, The Globe and Mail
Canadian marijuana stocks surged after the head of the country’s biggest producer said his company could cope with taxes as high as 25 per cent, extending a rally that began in the summer with the prospect of legal recreational use.
Bruce Linton, chief executive officer of Canopy Growth Corp., says Prime Minister Justin Trudeau’s government will probably choose to control the distribution of legal recreational marijuana through government-run outlets such as liquor stores. A task force is due to report this month on how Canada can build a legal weed market.
“We can probably carry a tax burden of 25 per cent or so and end up in the consumer hands on a still cost-competitive basis, with a superior product,” Mr. Linton said Monday in an interview at Bloomberg’s Ottawa newsroom.
Canopy, based in Smith Falls, Ont., became the first marijuana producer to trade on a major North American stock exchange when it graduated to the Toronto Stock Exchange in July. It became the first publicly traded Canadian producer of the drug in 2014.
The company’s share price more than doubled this month, bringing its market value past $1.6-billion, on better-than-expected earnings and after U.S. elections widened the scope for legal marijuana. The stock was up as much as 33 per cent Wednesday, and was up 5.4 per cent to $14.17 as of 2:10 p.m. Toronto time.
Emerald Health Therapeutics Inc. jumped as much as 62 per cent intraday, and Aurora Cannabis Inc. climbed as much as 50 per cent.