Canadian cannabis producer Canopy Growth Corp. appears to be facing another hurdle in its plan to “fast track” the company’s entry into the $34 billion U.S. marijuana market.
The U.S. Securities and Exchange Commission earlier this month notified the Smiths Falls, Ontario-headquartered company that the agency’s staff is opposed to the “deconsolidation” of a new U.S.-based holding company, Canopy USA, that would own three well-known American marijuana companies that Canopy Growth has agreed to purchase.
“Deconsolidation” refers to Canopy Growth presenting its own financial results in the same disclosure as the pro forma financial results of Canopy USA’s U.S.-based assets.
Canopy Growth disclosed the SEC’s objection in a Nov. 9 news release announcing the company’s second-quarter results for fiscal 2024.
The disclosure suggests the SEC’s objection is significant enough that it could take Canopy more time than anticipated to finalize the structure.
The three U.S. companies are New York-headquartered multistate operator Acreage Holdings, California-based extractor Jetty Extracts and Colorado-headquartered edibles maker Wana Brands.