The hits keep coming from Canopy Growth Corp (Canopy Growth Corp Stock Quote, Chart TSX:WEED), Canada’s cannabis kings who are reportedly more than tripling their investment in the US hemp market.

But as the pot sector looks back on a high-flying month of January, Canopy co-founder and CEO Bruce Linton suggests that investors should rightly be wary of a bubble.

Earlier in January, Canopy Growth announced its participation in the fledgling US hemp industry with a $150-million investment in production facilities in the state of New York, a position which has now been upped to $500 million for hemp operations across the United States.

Canopy is celebrating a successful January in which the company’s share price rocketed up 76 per cent, part of a sector-wide upturn which saw many of the cannabis stocks post gains well into the double digits.

Pot stocks, which had been sliding since mid-October, last received a friendly boost from Canopy in August of last year when Canopy announced that alcohol giant Constellation Brands was upping its investment in Canopy to the tune of $5 billion, increasing its ownership stake to 38 per cent. That news set off a run in pot which kept pushing stocks higher right up until the October 17 opening of recreational marijuana across Canada.

But just because the rec pot industry is now up and running doesn’t mean that there’s that much more clarity on who the winners and losers will be in the space, says Linton, who warns that there will be a lot of casualties yet to come.

“I think it’s entirely true that cannabis has become frothy and I’m not saying that necessarily specifically about our [stock],” in conversation with Yahoo Finance on Thursday. “But you could list 85 or 90 names that are probably publicly listed that I as the operator of one of the first and most dominant [companies] have never heard of those companies.”

“I think you’re going to find that the bubbles break with the small ones first because there’s not actually a probability that they’re going to put a billion dollars of revenue up or that they’re going to have a major scientific breakthrough or they’re going to have a 30-per-cent market share,” he says.

Linton says he’s surprised that Constellation Brands’ share price hasn’t benefited more from its Canopy investment, arguing that Constellation is tapping into a potentially huge market for adult-use cannabis beverages.

“I don’t understand why everybody isn’t buying Constellation stock,” he says. “Their stock traded down since they’ve put the money in [to Canopy] to where they’ve almost made that free.”

“What I’ve tried to make sure is that what we’re creating in Canopy is global exposure, recognizing that prohibition has made it such that if you’re the first to figure out how to scale, capture ingredient value, create medical outcomes and awesome recreational products, there’s about a $500-billion annual market,” Linton says. “And if you’re first, does that mean that you’re getting one per cent or 20 per cent? Just by the logic of the opportunity and the advancement that we’re making, it says that this should be a gigantic company.”

Canopy Growth will be reporting its third quarter 2019 financials after market close on February 14. Covering the three months ended December 31, 2018, this will give investors a first glimpse at Canopy’s business under legalized adult-use marijuana in Canada.