Canopy Growth Corporation (TSX:WEED, NYSE:CGC) recently outlined its latest steps to enter the US cannabis market through a US-domiciled company called Canopy USA LLC, which Canopy expects will comply with Nasdaq listing requirements.
The Canadian cannabis company said it has filed a revised proxy statement with the US Securities and Exchange Commission (SEC), modifying the structure of its US-domiciled company so that Canopy Growth would hold no more than 90% of Canopy USA, while adjusting the composition and nomination rights of Canopy USA’s board of managers, and make other amendments.
In October, the Nasdaq rejected Canopy Growth’s earlier proposal to consolidate Canopy USA’s earnings into its financial results, with its idea of a hands-off setup in which Canopy USA would have its own board and for Canopy Growth and majority shareholder Constellation Brands (NYSE:STZ) Inc to surrender voting rights by converting their stock to exchangeable shares.
With its latest changes, Canopy Growth will no longer require the consolidation of Canopy USA’s numbers into its results.
Canopy USA LLC will hold the companies in which Canopy Growth has options that would give it full control should cannabis be legalized at the federal level – Acreage Holdings, Inc, Jetty Extracts and Wana Brands.
The company added that it is now planning to hold a shareholder meeting once the SEC has reviewed the modified proxy to vote on authorizing an amendment to its articles of incorporation, which would allow it to create the class of non-voting exchangeable shares in the capital of Canopy Growth.
The US cannabis market is expected to be a more than $50 billion market opportunity by 2026, Canopy Growth stated.
Contact Sean at sean@proactiveinvestors.com