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Canopy Growth shares surge as shareholder vote paves way for expansion into US market

Published 2024-04-18, 01:32 p/m
© Reuters.  Canopy Growth shares surge as shareholder vote paves way for expansion into US market

Proactive Investors - Canopy Growth (TSX:WEED) Corporation (TSX:WEED, NYSE:CGC) shares are trending upwards after the Ontario-based company’s shareholders approved a new class of shares that will enable its swift expansion into the US cannabis market.

At a special shareholder meeting on Friday, April 12, investors approved a new exchangeable share structure that will facilitate its operations in the US under a US-domiciled holding company Canopy USA.

Following the vote, the company expects Canopy USA to "imminently" trigger the acquisition of US assets. It holds the rights to acquire multi-stage operator Acreage, edibles brand Wana, and cannabis extracts producer Jetty.

“With this successful shareholder vote complete, our Canopy USA strategy is advancing and is poised to make Canopy the first and only US listed cannabis company offering shareholders unique exposure to the rapid growth of the US cannabis market," CEO David Klein said in a statement.

"Canopy USA can now move quickly to acquire its US assets in Wana, Jetty, and Acreage, and we expect Canopy Growth to begin highlighting Canopy USA's financial performance to our shareholders later this year."

Klein added that he is “cautiously optimistic” that cannabis will be rescheduled by the Drug Enforcement Administration (DEA) to a lower-risk Schedule III drug in the near term following recent comments from the US president and vice president on the topic.

“Following this, we expect an immediate enhancement to the cashflow of Wana, Jetty, and Acreage resulting from the removal of the prohibition on business deductions in Section 280 which we expect to help power their growth,” the CEO said.

Canopy Growth stock added 22% to about US$8 in the early afternoon on Thursday. It has gained about 65% in the year-to-date.

It also lifted fellow Canadian cannabis company Aurora Cannabis Inc (TSX:TSX:ACB, NASDAQ:ACB). The Alberta-based company gained 11.7% at US$6.47.

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