Canopy Growth's surprise earnings hint at a cannabis turnaround

Cue the "high" jokes... Canopy Growth, Earth's biggest cannabis company, whipped up a surprise Friday: Stronger-than-expected revenues and a smaller-than-expected loss. Sales were up 62% from last quarter, and operating expenses were down 14%. That combo forms a soothing CBD balm on the bruised cannabis industry:

• Canada's green wave: In October 2018, recreational weed was legalized nationwide in Canada, making Amsterdam feel Puritan.
• The Willy-Wonka-moment investor dream: By early 2019, Aurora Cannabis, Tilray, and Canopy rocketed to multi-billion dollar valuations — everyone wanted to own a piece of the legal cannabis factory, which was expected to boom.
• The buzzkill reality: Consumer demand didn't meet those sky-high expectations — and enthusiastic cannabis co's found they'd over-produced. Didn't help that the US legalization trend (11 states so far for recreational pot) seems to have stalled.
• The popped bubble: Those top Canadian pot stocks started 2020 down by ~60% from the highs they reached just a year before — Tilray's fallen nearly 90%.

Aaaand exhale... Canopy's strong earnings lifted its own stock 13% on Friday. Then it passed the fun to the right — pot peers Aurora and Tilray both jumped almost 8%, and so did smaller cannabis companies in the US and Canada.