Is Canopy Growth Bullish on US Marijuana Legalization?

Cannabis in the United States

Cannabis hasn’t been legalized in the United States. However, Canopy Growth (WEED) acquired the right to purchase Acreage Holdings—a US-based vertically integrated cannabis company. The US market is expected to be bigger compared to the Canadian market. The US market is often viewed as the next catalyst for Canadian producers including Aphria (APHA), Aurora Cannabis (ACB), and Tilray (TLRY).

Since the announcement, Canopy Growth has gained nearly 18%. However, Canopy Growth hasn’t acquired Acreage Holdings. Canopy Growth has the right to acquire the company if cannabis becomes legalized federally in the United States (MJ). In a recent interview with Bloomberg, Canopy Growth’s Co-CEO Bruce Linton stated that he doesn’t expect cannabis to be legalized in the near term.

Is Canopy Growth Bullish on US Marijuana Legalization?

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Other developments

Currently, the intention of legalizing cannabis federally is largely a non-starter. Developments raised hope for near-term relief for cannabis operators in the United States. Recently, there was an effort to amend the Controlled Substance Act and certain provisions related to marijuana so that each state will have the right to determine how to regulate marijuana without interference from federal authorities. Senator Elizabeth Warren and Senator Cory Gardner reintroduced the Strengthening the Tenth Amendment Through Entrusting States Act to the Senate. The act would give individual states where cannabis is legalized the freedom to create legislation without interference from federal authorities.