- After rearranging its capital structure, Canopy Growth (TSX:WEED) will be closer to establishing a U.S.-based multi state operator
- Shareholders overwhelmingly approved the creation of a new class of exchangeable shares of the cannabis company, which could enable the acceleration of its entry into the U.S. THC market
- Canopy USA’s portfolio includes some highly recognized U.S. cannabis brands that the team believes are ideally positioned in the fastest growing categories, such as edibles, vapes and flower.
- Canopy Growth stock closed trading at C$9.59 per share
After rearranging its capital structure, Canopy Growth (TSX:WEED) will be closer to establishing a U.S.-based multi state operator.
Shareholders overwhelmingly approved the creation of a new class of exchangeable shares of the cannabis company, which could enable the acceleration of its entry into the U.S. THC market, which is expected to be more than US$52 billion by 2026.
This is part of Canopy’s strategy to accelerate its entry into the U.S. cannabis industry and utilize the value of its full U.S. cannabis ecosystem through the creation of a new U.S.-based holding company, Canopy USA, LLC.
At its shareholder meeting on April 12, 2024, a special resolution was passed to authorize an amendment to the company’s articles of incorporation to create a new class of exchangeable share of the company, which would enable the creation of Canopy USA, the company’s means to break into the U.S. market. Canopy USA is expected to advance imminently with triggering acquisition of U.S. assets.
Fast track entry into the one of the fastest-growing cannabis markets
Through these “stepping stone” transactions, Canopy Growth intends to be strategically repositioned to capitalize on the benefits of complete ownership and control of its U.S. THC portfolio of assets.
Canopy USA’s portfolio includes some highly recognized U.S. cannabis brands that the team believes are ideally positioned in the fastest-growing categories, such as edibles, vapes and flower.
The combination of U.S. cannabis assets is expected to generate revenue and cost synergies within Canopy USA by leveraging the brands.
Next steps
After the creation of the exchangeable shares, Constellation Brands Inc. (NYSE:STZ) Canopy Growth’s largest shareholder, is expected to convert its shares into exchangeable shares and the Constellation nominees that are currently sitting on the company’s board of directors are expected to resign as directors of the company after the expected termination of the second amended and restated investor rights agreement.
A total of 95.56 per cent of shareholders voted in favour, 4.07 per cent voted against and 0.37 per cent were absent.
About Canopy Growth
Canopy Growth is a North American cannabis and consumer packaged goods company. Its brands include Doja, 7ACRES, Tweed, Deep Space, Martha Stewart CBD and Storz & Bickel.
Canopy Growth stock (TSX:WEED) closed trading at C$9.59 per share and is up 142.46 per cent in the past month, but down 52.76 per cent year-over-year.
The company has positioned itself to capitalize on U.S. cannabis legalization through its rights to Acreage Holdings, a vertically integrated multi-state cannabis operator, Wana Brands, a cannabis edibles brand, and Jetty Extracts, a producer of cannabis extracts and a pioneer of clean vape technology.
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