Canopy Growth’s Future Hinges On US Cannabis Regulatory Shifts, Says Analyst, Issuing ‘Neutral’ Rating
Zuanic & Associates has initiated coverage on Canopy Growth (NASDAQ:CGC) with a “Neutral” rating, citing both potential growth opportunities and significant structural challenges. While acknowledging the company’s efforts in cost-cutting and strategic repositioning, Z&A analyst Pablo Zuanic remains cautious due to regulatory uncertainties in the U.S. and profitability concerns in international markets.
Canopy Growth’s U.S. Market Play
Unlike most Canadian cannabis companies, Canopy Growth has established a significant footprint in the U.S. market. Through its Canopy USA (C-USA) entity, it holds non-voting stakes in major U.S. cannabis brands, including Wana Brands (edibles), Jetty Extracts (vape) and multi-state operator Acreage Holdings. This structure allows Canopy Growth to gain exposure to the U.S. market while maintaining compliance with NASDAQ listing requirements.
Z&A notes that Canopy Growth’s U.S. expansion relies heavily on regulatory developments. Federal reform remains a major wildcard and while there is optimism about potential changes under the new administration, there are no guarantees. In the meantime, Canopy’s U.S. businesses will need to scale efficiently, particularly in key markets like New York, Pennsylvania and Ohio.