Marijuana firm Canopy Growth (NYSE:CGC,TSX:WEED) will become the first cannabis company to join the S&P/TSX 60 Index (TSX:TX60) by replacing a legacy gold company.
On Thursday (April 11) S&P Dow Jones Indices confirmed the C$19 billion Canadian cannabis company will be added to the large-cap index, taking the spot of Goldcorp (NYSE:GG,TSX:G).
The holding for the gold company in the index will be reassigned since the firm is set to be acquired by Newmont Mining (NYSE:NEM) in a deal worth US$10 billion.
Canopy’s inclusion will take place “prior to the open of trading on Thursday, April 18,” according to S&P Dow Jones Indices.
According to the index operators, S&P/TSX 60 “addresses the needs of investment managers who require a portfolio index of the large-cap market segment of the Canadian equity market.”
In addition to the swap between firms, Goldcorp will also be dropped from the S&P/TSX Composite Index.
Shares of Canopy quickly rose on Friday’s (April 12) trading session. In Toronto the company was up 4.81 percent at 2:17 p.m., while in New York shares of the firm rose 4.22 percent.
The S&P/TSX 60 Index was also up on Friday with a marginal rise of 0.59 percent.
Bruce Linton, co-CEO of Canopy, said in a press release the inclusion marked another “major accomplishment” for the company.
Canopy has marijuana operations in Canada, Latin America and Europe. The company has also announced expansion plans to the US to produce hemp and sell derivative products.
Canadian Press reported the resulting entity from the Goldcorp acquisition is set to pursue a new listing on the Toronto Stock Exchange.
On Thursday shareholders of Newmont approved the issuance of common shares in relation to the acquisition offer for the Canadian gold company Goldcorp. However, the acquisition closing date has not been indicated.
“We thank Newmont’s shareholders for their overwhelming support for this compelling value creation opportunity as we build the world’s leading gold company,” Gary Goldberg, CEO of Newmont said in a press release.
The Financial Post reported Newmont’s acquisition of Goldcorp will become the world’s largest gold miner and could produce six to seven million ounces of gold per year over the next 10 years.
Brian Leni, founder of Junior Stock Review previously told the Investing News Network (INN) the acquisition of Goldcorp was inspired by another recent acquisition and “that’s a really good thing.”
Some of the top stocks by weight in the index include Canadian banks Royal Bank of Canada (NYSE:RY,TSX:RY), Toronto-Dominion Bank (NYSE:TD,TSX:TD) and energy firm Enbridge (NYSE:ENB,TSX:ENB).
The index holds a total of only 60 constituents in its list that are meant to be seen as long positions.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
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