Tom Frank | CNBC
Canadian cannabis company Canopy growth It said on Tuesday it is consolidating its US assets into a new holding company to speed up its entry into the US market.
The company said the creation of Canopy USA will help it reduce costs and tap into the US market, which is projected to be more than $50 billion by 2026. Marijuana is not yet federally legal in the US
“As the US cannabis market continues to grow rapidly at the state level, this strategy allows us to take control of our own destiny and take advantage of the largest once-in-a-generation cannabis market opportunity in world,” said David Klein, CEO of Canopy Growth Corp.
Canopy said the move will allow it to complete the acquisition of New York-based Acreage Holdings, Colorado-based edibles specialist Wana Brands and California extract maker Jetty. Those assets will be housed under Canopy USA.
Canopy shares closed up 27% on Tuesday.
A huge spirit Constellation brandswhich acquired a stake in Canopy Growth in 2017 for $190 million, will convert its existing common shares in Canopy into new exchangeable shares, which it said will protect shareholder value and maintain its interest in Canopy through non-voting and non-participation . shares.
Constellation said in a statement that the move is aligned with its decision to focus on its core beer, wine and spirits businesses.
“We believe that the conversion of our ownership interest will preserve Constellation’s ability to realize the potential benefit of our investment in Canopy,” said Constellation CEO and President Bill Newlands.