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Canopy Growth Corporation’s plan to fast-track US entry ‘the first clear path for MSO uplisting,’ Stifel GMP analysts say

Canopy Growth Corporation’s (TSX:WEED, NYSE:CGC) plan to fast-track its entry into the US cannabis market is the first clear path for multi-state operator (MSO) uplisting, according to analysts at Stifel GMP. 

On Tuesday, the Canadian cannabis producer announced plans to create a holding company, Canopy USA LLC, to speed up its entry into the US cannabis market, the largest and fastest-growing cannabis market in the world. 

Canopy Growth stock soared on the news yesterday, with its Nasdaq-listed shares up 27% and its Toronto Stock Exchange-listed shares up 25.7%.  

READ: Canopy Growth soars on plans to fast track entry to US cannabis market

Stifel analysts wrote in a note to investors that this move by Canopy Growth could have important implications for their cannabis coverage, including potentially establishing a pathway for US cannabis companies to graduate to senior exchanges, triggering a material re-rating, given better liquidity, access, and custodian opportunities. 

It could also enable other strategics to enter the US cannabis industry, causing asset price inflation, the analysts wrote.

“Among our US cannabis coverage, we highlight CL (Cresco Labs Inc) as the most levered to asset price inflation given its CCHW (Columbia Care Inc) transaction and required divestitures in an unfavourable macro backdrop with recent industry M&A developments potentially suggesting some asset value deflation since the transaction was announced, in our view,” they wrote.

The analysts added that they believed the largest companies in their coverage, Curaleaf Holdings Inc., Green Thumb Industries Inc. (CSE:GTII, OTCQX:GTBIF), and Trulieve Cannabis Corp, had the greatest resources to explore uplisting and thus could be the first.

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