Canada Pot Stocks Have Real Reason to Rise as Medical Use Surges

(Bloomberg) -- Canadian marijuana stocks can surge on the slightest hope -- from legalization in California where most don't even have exposure -- to forecasts for explosive sales growth. But here's a concrete reason for support: use of the drug for medical purposes is surging in Canada.

People registered to use medicinal marijuana reached 235,621 by the end of September, up 40 percent from the end of March, according to quarterly figures released Thursday by Health Canada, the nation's public health agency. About 0.6 percent of the country's almost 37 million population use pot for pain and other afflictions.

Canadian pot stocks have been on a tear of late. Canopy Growth Corp. has become the world's biggest pot stock with a market value of C$6.2 billion ($5 billion) as the government gets ready to legalize the drug for recreational use by July. The stocks took a tumble on Thursday after news emerged that U.S. Attorney General Jeff Sessions plans to rescind an Obama-era policy that allowed recreational use to flourish in many states. U.S. attorneys in states where pot is legal will now be able prosecute cases where they see fit.

--With assistance from Natalie Wong

To contact the reporter on this story: Lily Jamali in Toronto at ljamali1@bloomberg.net.

To contact the editors responsible for this story: Jacqueline Thorpe at jthorpe23@bloomberg.net, Steven Frank

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