Canopy Growth (CGC) reportedly said it would be able to “move ahead” into the U.S. if legislation were in place preventing the federal government from interfering with state cannabis policies, as marijuana stocks eye a potentially friendlier U.S. market.
While more states are legalizing cannabis, the uncertainty at the federal level has kept some marijuana companies and their partners on the sidelines.
In January, U.S. Attorney General Jeff Sessions rescinded the laissez-faire Obama-era guidance that enabled many states to move forward with some form of pot legalization.
But a sharp backlash followed and Sens. Elizabeth Warren and Cory Gardner introduced the STATES Act, which would ensure that “each State has the right to determine for itself the best approach to marijuana within its borders,” according to a one-page description.
“The U.S. has had a history of, ‘When we can’t agree, let’s just allocate the authority to the state, and if they say it’s OK, it’s OK,’ ” Canopy Growth CEO Bruce Linton said at MJBizCon in Toronto on Thursday, according to Bloomberg. “That would be an outcome which would allow us to move ahead.”
A day earlier, during Canopy Growth’s earnings conference call, Linton said “we definitely do not participate in federally illegal markets.”
When asked if he was signaling a loosening in Canopy Growth’s stance on entering the U.S., a company spokeswoman told IBD that “Bruce’s remarks during the earnings call still stand. We will not enter markets where cannabis is federally illegal.”
Still, Linton’s remarks came as the marijuana industry increasingly takes advantage of gaps in the legal firewall between the U.S. and Canada — striking cross-border deals and attempting to draw investors ahead of recreational legalization. Recreational legalization in Canada takes hold on Oct. 17.
Legal Marijuana Opportunities
Corona parent Constellation Brands (STZ), which has deepened its investment in Canopy, in October said it had “no plans to sell any cannabis products in the U.S. or any other market unless or until it is legally permissible to do so at all government levels.”
In June, Constellation CEO Rob Sands said that if “we see that opportunity within the confines of what we can legally do, we will do it.”
During the company’s earnings conference call on Wednesday, Canopy’s Linton said the competition a year to a year-and-a-half from now “won’t be any of the cannabis names that are started up in Canada. It will be big pharma. It will be other packaged beverage.”