Canada has legalised cannabis for recreational use, clearing the way for millions of adults to smoke or grow the drug openly. Other nations may follow, but investing will not be as simple as buying stocks exposed to hemp farming. Cannabis shares are getting sky high, all the same. Canopy Growth, Canada’s biggest pot stock by market value, has scaled new heights. The Horizons Marijuana Life Sciences Index, which tracks North American weed stocks, is up nearly a third from mid-April lows. The problem for investors seeking a hit is that most publicly traded cannabis companies are small. Some are downright speculative. The industry kingpins are little more alluring, given eye-watering valuations. Canopy is up 75% since April and is worth C$9bn ($6.7bn), despite a net loss of C$7.5m on a paltry C$39.9m in sales in 2017. Short sellers have taken notice. IHS Markit says $2.5bn in cannabis stocks are being shorted, quadruple the figure a year ago. Big Tobacco may be a cheaper and safer way ...

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