Last week, Canadian pot producer Canopy Growth (CGC 5.33%) made headlines when it announced the creation of a new holding company, Canopy USA. The move promises to speed up its entry into the U.S. cannabis market once it's able to do so.

The development drove some excitement behind the stock, sending its shares rallying on the news. Does the company's latest move make Canopy Growth a buy today?

What Canopy USA does for Canopy Growth

The launch of Canopy USA effectively gives Canopy Growth a way to execute pending deals it has in place with multiple U.S.-based companies. Otherwise, it wasn't going to be able to close on those transactions until legalization took place in the U.S. That's because currently, due to the federal ban on pot in the U.S., Canopy Growth can't invest in a multi-state marijuana operator or plant-touching business without being in violation of the rules of the Nasdaq and Toronto Stock Exchange, where its shares currently trade.

Through Canopy USA, however, Canopy Growth will be able to hold its U.S. assets there. This includes multi-state operator Acreage Holdings, edibles maker Wana Brands, and cannabis extracts company Jetty. By launching Canopy USA, it saves time for Canopy Growth by not having to execute on these deals after legalization, and its press release says this will "fast track entry into the U.S. cannabis market."

Why investors should remain hesitant

Canopy Growth states in the release that while Canopy USA will have an interest in these U.S.-based businesses, Canopy Growth will not. And it will only have non-voting shares in Canopy USA. Until it converts those shares into common stock, it will also "have no economic or voting interest in Canopy USA."

What Canopy Growth looks to be doing here is getting the best of both worlds -- claiming to be a separate entity from Canopy USA but wanting to execute on its pending deals and potentially including them on a pro forma basis to investors. The bottom line is that the companies are still separate, and until legalization takes place, effectively nothing has changed.

While Canopy Growth may have believed it fast-tracked its expansion into the U.S., it's questionable how much time it really saved by doing this. My suspicion is that the motivation behind this is so that regardless of whether legalization takes place, Canopy Growth will be able to report its sales and earnings numbers on a pro forma basis (show what its numbers would have been with the effect of those U.S. businesses included within Canopy USA).

Canopy Growth CEO David Klein believed significant marijuana reform was imminent in January 2021, when he predicted his company would be operating in the U.S. within a year. If that was surely the case, then it begs the question of why a holding company wasn't set up much earlier than now.

With sales sliding of late and mounting stock losses (since the start of 2021, the pot stock is down 84%), the motivation for the company's latest move may have been to help drum up some excitement behind the business and to convince investors legalization is close, as opposed to a desire to "fast-track" entry into the U.S.

Chart showing Canopy Growth's quarterly year-over-year revenue falling since early 2021.

Data by YCharts.

Is Canopy Growth a buy today?

There isn't any significant substance behind Canopy Growth's latest move to suggest the stock is any better a buy than it was just a few weeks ago. Investors shouldn't get distracted by this. Regardless of whether it's Canopy USA or a series of pending deals that can't be closed, the fact remains that Canopy Growth can't consolidate any results from Acreage, Wana, or Jetty until U.S. legalization takes place -- and that could be years away from being a reality.

Canopy Growth's obsession with the U.S. market is a troubling one, especially when its core operations are so deep in the red. The company has incurred losses totaling nearly 3 billion Canadian dollars over the trailing 12 months, and its sales have been declining in recent quarters. Canopy Growth's business isn't in good shape, and if not for the billions of dollars that beer maker Constellation Brands poured into the pot business years ago, Canopy Growth could be in a much more perilous position today.

This is an ultra-risky stock to be holding, and while there is potential in the long term, investors should temper their expectations. It could still be a long time before Canopy Growth and Canopy USA are able to consolidate.