Cannabis shares rally as Canopy seeks to accelerate U.S. market entry
U.S.-listed shares of Canopy ended up 27.1% at $2.91, and were among the biggest daily percentage gainers on Nasdaq.
Shares of Tilray Brands (TLRY.O) were up 13.3%, U.S.-listed shares of Aurora Cannabis were up 19.2% and SNDL Inc (SNDL.O) was up 9.4%. The new entity will take over Acreage Holdings Inc (ACRGau.CD) in return for shares of Canopy Growth.
[1/2] A sign featuring Canopy Growth Corp oration’s logo is pictured at their facility in Smiths Falls, Ontario, Canada, January 4, 2018. REUTERS/Chris WattieNEW YORK, Oct 25 (Reuters) – Shares of marijuana producers jumped on Tuesday, led by a rally in Canada’s Canopy Growth Corp (WEED.TO), after it said it will create a holding company to fast track its entry into the United States. U.S.-listed shares of Canopy ended up 27.1% at $2.91, and were among the biggest daily percentage gainers on Nasdaq. The stock also registered its biggest one-day percentage gain since Aug. 15, 2018. Shares of Tilray Brands (TLRY.O) were up 13.3%, U.S.-listed shares of Aurora Cannabis were up 19.2% and SNDL Inc (SNDL.O) was up 9.4%. Canopy on Tuesday outlined a holding company structure to set up Canopy USA LLC . The new entity will take over Acreage Holdings Inc (ACRGau.CD) in return for shares of Canopy Growth . read moreGaining exposure to the U.S. market would be a plus for Canopy , but since public marijuana companies’ stocks are low-priced, “any move is amplified because markets expect little from these names,” Jessica Rabe, co-founder of DataTrek Research, said in an e-mail.Federal legalization of marijuana in the United States could still be “a long way off, especially if Republicans take back Congress in the upcoming mid-term elections,” she said, and cannabis companies need to navigate many U.S. state laws and regulations.
Canopy Growth ‘s U.S.-listed shares are down about 67% for the year.
Cannabis stocks jumped earlier this month after U.S. President Joe Biden took steps to overhaul U.S. marijuana policy. read moreAmong other cannabis stocks, U.S.-listed shares of Hexo Corp were up about 8% and OrganiGram Holdings’ U.S.-listed shares were up 7.4%.Meanwhile, beverage firm Constellation Brands (STZ.N) announced a plan to convert its existing ownership in Canopy into new exchangeable shares . Constellation’s stock ended up 3.9%.
