By Ed Lin, barrons.com
Bank of Montreal owned $73 million in U.S.-listed pot stocks at the end of the third quarter. CIBC and U.S. Bancorp owned $5 million and $2 million, respectively.
As third-quarter filings roll in from financial institutions, some big names are showing an appetite, or at least the munchies, for marijuana stocks traded in the U.S. Not surprisingly, firms in Canada took the lead, as marijuana became legal for recreational use there last month in a widely expected move.
Bank of Montreal’s total U.S.-traded marijuana stock investments, held through several subsidiaries, were valued at $73.2 million at Sept. 30, Barron’s calculates, based on a filing the bank made to the Securities and Exchange Commission. Canadian Imperial Bank of Commerce unit CIBC Asset Management owned $5.17 million in such securities, while U.S. Bancorp (USB) unit US Bank National Association owned $2.22 million.
The holdings do not include investments in marijuana stocks listed in Canada.
None of the financial institutions in this article provided comments in response to questions.
Earlier this week, we noted that Toronto Dominion’s asset-management arm raised its stake in Canopy Growth (CGC), a cannabis company in Smith Falls, Ontario, in the third quarter. Canopy Growth is 37%-owned by Constellation Brands (STZ), which also owns warrants that would lift the stake to 56% if exercised.
Bank of Montreal bought more Canopy Growth, too, nearly doubling its overall holdings to 1.37 million shares at the end of September from 771,343 shares at the end of June.
Bank of Montreal’s BMO Capital Markets and Cowen acted jointly as bookrunners for Tilray’s (TLRY) initial public offering in the U.S. and Canada in July. Tilray, of Nanaimo, British Columbia, is a cannabis cultivator, processor and distributor. At the end of the third quarter, Bank of Montreal had an overall ownership of 17,179 Tilray shares.
The bank also owned other pot stocks at the end of September, including 312,737 shares of Toronto-based Cronos Group (CRON), 1,875 American depositary receipts of U.K.-based “cannabinoid therapeutics” developer GW Pharmaceuticals (GWPH), and 37,800 shares of New Age Beverages (NBEV), which last month launched drinks infused with CBD, a nonintoxicating compound found in cannabis.
CIBC’s sole U.S.-listed pot investment was 106,407 shares of Canopy Growth as of the end of the third quarter.
At the end of September, U.S. Bancorp overall held 11,400 GW Pharmaceuticals ADRs, 3,503 Canopy Growth shares, 4,729 Cronos Group shares, and 184 Tilray shares.
Cowen, the co-bookrunner for Tilray’s IPO, hasn’t filed its third-quarter SEC portfolio report yet, so it’s too early to see whether it owns any Tilray shares. But at June 30, Cowen owned 900 ADRs of GW Pharmaceuticals.
Marijuana is one type of green investing that has been paying off. Tilray shares were priced at $17 for the IPO, but on Tuesday they closed at $106.86, a more than sextupling of the stock price in less than four months.