Canopy Growth Obtains Shareholder Approval to Move Ahead With Canopy USA: Here's What It Means for Investors
Canopy Growth (NASDAQ: CGC) is moving ahead with its plans for Canopy USA. After shareholders voted overwhelmingly in favor of its latest growth strategy for the U.S. pot market, the company is ready to take the next steps. Here's a look at what will those steps be, what they mean for investors, and whether these developments make Canopy Growth a better buy moving forward.
Now that it has obtained shareholder approval, Canopy Growth has created a new class of exchangeable shares. Although they have no voting rights or dissolution rights, they can be converted into shares. And it is through these exchangeable shares that Canopy Growth can create a structure where it can have an interest in Canopy USA, execute acquisitions, and not disrupt its listing on the Nasdaq Stock Market.
Beer maker Constellation Brands has already converted its shares into the exchangeable shares and there has been a reshuffling of Canopy Growth's board of directors. The move comes as Constellation Brands looks to eliminate the impact of the pot producer's losses on its financials and as it distances itself from the struggling company. Constellation Brands invested $4 billion into Canopy Growth back into 2018, in a move that simply hasn't paid off for the business.
Source Fool.com
