Canopy Growth (NYSE:CGC) reports earnings before the market opens on Nov. 14. This will serve as the first earnings report since the Smiths Falls, Ontario-based firm began to reap the benefits of cannabis legalization. Still, this event occurred after the quarter ended on Sept. 30, so no post-legalization sales figures will come out on CGG stock.

Despite this fact, Wall Street will watch reactions closely. Legal status can chill the appeal out, and by extension, cut the multiples of cannabis stocks. Still, Canada’s lead in this industry should give the company other markets where anticipation of legal status can bolster Canopy stock.

Revenues, Earnings Will Improve

For the second quarter of fiscal 2019, Wall Street predicts a quarterly loss of 12 cents per share. This would represent a drop from the same quarter last year when the company reported a loss of only one cent per share. Despite this setback, most analysts also forecast that the company will turn profitable beginning in the next fiscal year.

Revenues also point in this direction. Analysts also believe CGC will bring in C$91.17 million ($69.15 million). This climbed almost 419% from the same quarter last year when Canopy brought in C$17.57 million ($13.33 million).

CGC stock has generally moved higher since before its move to the New York Stock Exchange. American liquor giant Constellation Brands (NYSE:STZ) provided the main catalyst in August. At that time, it announced a $4 billion investment on top a smaller stake of $191 million it revealed in October 2017. These two stakes give Constellation a 38% stake in CGC stock. Due to this stake, many see CGC as the safest of the Canadian marijuana stocks. This perception lasts despite Tilray (NASDAQ:TLRY) becoming the largest cannabis stock.

Legal Status Changes Everything

Still, legal status creates a new world for CGC and all marijuana stocks. These quarterly numbers will not cover sales since weed became legal. For that reason, the report might as well report the second quarter of 1919 instead of 2019. Today, investors hold a new concern.

Once people adapt to the legal status of weed, the industry becomes boring, investors sell and stocks fall to price-earnings (P/E) ratios comparable to those seen in the alcohol or tobacco industries. This will happen to CGC and its peers at some point.

Has Canopy stock begun to fall victim to this phenomenon? Like other stocks in its sector, CGC stock saw a dramatic selloff once legal status became official. Since just before the Oct. 17 milestone, CGC has fallen by one-third. Now, investors want to know if that selling will continue.

Legalization Wave in Other Countries Could Help Canopy Growth Stock

Despite the decline, I remain unconvinced that Canopy’s heyday has ended. Yes, the wave of excitement has come, and is now quickly going, in Canada. However, most every other Western country has yet to ride that wave.

This could also come true in the sought-after U.S. market. Since the quarter ended, Jeff Sessions, arguably the most powerful and ardent anti-marijuana crusader in recent history, lost his job as attorney general. We do not yet know the attitudes of the current attorney general. However, President Donald Trump has shown openness toward legalizing medical cannabis across the U.S. while leaving recreational policies up to the states.

If the U.S. loosens restrictions, the alliance with Constellation offers the perfect segue for entering the U.S. once that becomes legal. With that, Canopy can ride an anticipation wave all over again in a nearby country with nearly ten times the population. Also, that does not include Europe, which will likely see the same excitement. Hence, the heyday of CGC stock may not have ended — it could just be getting started.

The Bottom Line on CGC Stock

The latest earnings report of CGC stock will focus not on the old news, but whether the company can keep the wave of anticipation going in other countries. The quarterly report will report earnings and revenue for the final quarter before legalization. Observers will likely not focus on numbers from a now bygone era. Due to legal status, Canopy stock enters a whole new world.

Also, with the stock taking a hit since legalization, investors need to know if Canopy’s product has become passé, or if the excitement has merely moved to other countries.

I lean toward the latter, particularly with Canopy Growth’s market leadership and first-mover status. That will become even more significant if the U.S. relaxes its cannabis laws. Yes, the highs seen in CGC stock and its peers will eventually go up in smoke. However, for now, many places will first have to get high.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting.