Canada's largest medical marijuana producer, Canopy Growth, took a hit after its first earnings report as a public company in the U.S. stoked fears Canadian marijuana is overvalued, but CEO Bruce Linton shrugged off investor concerns on Thursday. He said the company focused more on cannabis as a product, than cannabis as a commodity.

In Canada, "by 2020 or 2021, there will be too much cannabis produced. If I'm still selling primarily an ingredient, I have completely dropped the ball. You want to transform it," Linton said on CNBC's "Squawk Alley."

As Canada marches toward recreational legalization in October, two of the marijuana-based products Linton is most optimistic about marketing to a broader audience are beverages and sleep aids.

Marijuana in beverage form has attracted a lot of attention and some major investment lately. California-based Lagunitas Brewing, which is owned by Heineken, announced on Tuesday the launch of an infused sparkling water to be sold in select locations around California. The announcement came shortly after reports that Molson Coors was in talks with several major Canadian cannabis companies, including Aphria and Aurora Cannabis.

Months earlier, Corona beer owner Constellation Brands announced in October it had taken a 10 percent stake in Canopy.

Linton hinted Canopy's future products could look a lot like Lagunitas' latest drink.

"It goes back a long time. We've been thinking about beverages as a way to mood modify and socialize," he said.

"I find that people would like to have a beverage that makes them more positive, uplifted and has a feeling of having a beer or glass of wine. And the kicker is — how would you like to have zero calories?" Linton added.

Canopy is also working on a sleep aid Linton touts as a potential "disruptor to Ambien." It isn't too far-fetched an idea, considering the Food and Drug Administration just approved pharmaceutical company GW Pharmaceuticals' cannabidiol-based Epidiolex to treat epilepsy.

As for a customer base for these products, Linton is casting his net wide. As medical marijuana consumers make up about 90 percent of Canopy's customer-base, Linton said, Canopy will continue to target "middle-aged" people with "a chronic something going on."

Canopy's goals may be lofty, but Linton feels confident the marijuana giant is well positioned to continue being a leader in the industry, so long as the company focuses on products first.

"Did you buy cannabis or an outcome? You have to transform the ingredients, that's the business we are in right now," Linton said.

A day after its stock drop, Canopy Growth shares pared Wednesday's losses, gaining more than 9 percent.