Canopy Growth Corporation's WEED CGC shareholders approved the creation of a new class of exchangeable shares of the company during their special meeting on Friday, April 12, as recommended earlier by Institutional Shareholder Services (ISS).
What Happened
At the meeting, shareholders passed a special resolution authorizing an amendment to the company’s articles of incorporation to create and authorize the issuance of an unlimited number of a new class of non-voting and non-participating exchangeable shares in the capital of Canopy Growth.
The exchangeable shares will not carry voting rights or rights to receive dividends or other rights upon dissolution of Canopy Growth but will be convertible into shares.
A total of 32,250,578 common shares of Canopy, representing 35.40% of the issued and outstanding shares, were voted in connection with the meeting by the company’s shareholders and proxy holders.
See also: Canopy Growth Enters US Market: What’s Next For The Innovative Cannabis Brand?
Why It Matters
The move enables the acceleration of Canopy Growth’s entry into the U.S. THC market, which is forecasted to reach roughly $50 billion in 2026, the company said on Monday in a press release.
“With this successful shareholder vote complete, our Canopy USA strategy is advancing and is poised to make Canopy the first and only U.S. listed cannabis company offering shareholders unique exposure to the rapid growth of the U.S. cannabis market,” said David Klein, Canopy Growth's CEO who launched Canopy USA in 2022.
Klein, a speaker at this week’s Benzinga Cannabis Capital Conference in Florida has been directing the company’s move toward the North American cannabis market since his tenure began in 2020.
What's Next
Canopy USA holds the Company’s U.S. cannabis investments, which will enable it to exercise rights to acquire Acreage Holdings, Inc. ACRHF, Mountain High Products, LLC, Wana Wellness, LLC and The Cima Group, LLC (collectively, Wana) and Lemurian, Inc. (Jetty).
“Canopy USA can now move quickly to acquire its U.S. assets in Wana, Jetty, and Acreage, and we expect Canopy Growth to begin highlighting Canopy USA’s financial performance to our shareholders later this year,” Klein continued.
He added that the Canadian cannabis giant is "cautiously optimistic" that cannabis will be moved to Schedule III shortly.
"Following this, we expect an immediate enhancement to the cash flow of Wana, Jetty, and Acreage resulting from the removal of the prohibition on business deductions in Section 280 which we expect to help power their growth,” Klein said.
Now read: Canopy Growth CEO Says German Cannabis Market Has ‘Ability To Grow 10x’ Following Legalization
CGC Price Action
Canopy Growth's shares traded 7.31% lower at $7.23 per share at the time of writing on Monday morning.
The Benzinga Cannabis Capital Conference is happening in Florida at a new venue in Hollywood on April 16-17. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.
Get your tickets now on bzcannabis.com – Prices will increase very soon!
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The Benzinga Cannabis Capital Conference is coming to Florida
The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.
Get your tickets now on bzcannabis.com – Prices will increase very soon!