Canadian marijuana company Canopy Growth (CGC 1.09%) will be directly active in the U.S. market inside of a year. That's according to CEO David Klein, who is banking on the environment for cannabis businesses in the U.S. to improve markedly in the proximate future.
"What we really need is some combination of SAFE Banking, a revised Cole memorandum, and a reclassification by the executive branch, all of which ... probably happens in the next six to eight months anyway," he said in an interview Friday with Canadian business news organization BNN Bloomberg.
He was referring to the SAFE Banking Act, originally passed in the House of Representatives in 2019 but yet to be introduced in the Senate. It effectively frees banks to provide a range of financial services to marijuana companies. At the moment, lenders avoid this because the drug is illegal at the federal level, if not in several states.
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This federal/state disparity is due to the Cole memorandum, a 2013 document authored by James Cole, who was then deputy attorney general, that stated the Justice Department would not enforce federal prohibition in states opting to legalize the drug. Vice President-elect Kamala Harris has said that the new administration will decriminalize marijuana.
Among Canadian marijuana companies, Canopy Growth is best positioned for a quick and effective entry into the U.S. market. The company has a deal to acquire U.S. peer Acreage Holdings when and if marijuana becomes legal throughout the country. Canopy Growth also holds 21% equity in another American weed business, TerrAscend.
Investors might not be eager to wait around for months for Canopy Growth to get its chance. On Friday, the company's shares were down by 1.1% in late afternoon trading, in contrast to the 0.5% gain of the S&P 500 index.
