Cannabis shares rally as Canopy seeks to accelerate U.S. market entry

Organigram Global

25/10/2022 21:17

NEW 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  CGC.O  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  ACB.O  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.
 urn:newsml:reuters.com:*:nL4N31Q2O5 
    Gaining 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.  urn:newsml:reuters.com:*:nL1N31726A
    Among other cannabis stocks, U.S.-listed shares of Hexo Corp
 HEXO.O  were up about 8% and OrganiGram Holdings' U.S.-listed
shares  OGI.O  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%. 
 (Reporting by Caroline Valetkevitch; Additional reporting by
Lance Tupper in New York; Editing by Bill Berkrot)
 ((caroline.valetkevitch@thomsonreuters.com))