The Cannabis Stock Big Money Managers Are Quietly Buying
Key Points
During the third quarter, asset managers increased their positions in Canopy Growth, one of the largest Canada-based integrated cannabis companies.
Last December, a small amount of progress related to U.S. legalization led to a brief turbo-rally for Canopy Growth and its peers.
As shares have pulled back since, has Wall Street's smart money cashed out, or are they capitalizing on renewed weakness?
- 10 stocks we like better than Canopy Growth ›
Canada-based Canopy Growth (NASDAQ: CGC) 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.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the 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.
Image source: Getty Images.
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.
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.
Should you buy stock in Canopy Growth right now?
Before you buy stock in Canopy Growth, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Canopy Growth wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $431,111!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,105,521!*
Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 195% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of February 4, 2026.
Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Recommended Articles
