Canopy Growth is now warning that its planned creation of a US holding company, Canopy USA, could potentially lead to the delisting of its shares on Nasdaq, per an SEC filing.
The reason is that US stock exchanges do not permit the listing of cannabis companies that primarily operate in the US.
“While we believe that we comply with all applicable laws and regulations, as well as the applicable cannabis related policies of…Nasdaq, our interpretation may differ from those of the stock exchanges now or in the future, and therefore…Nasdaq could allege that, as a result of our non-voting and non-participating interest in Canopy USA, we violate the exchanges cannabis-related policies,” Canopy (NASDAQ:CGC) says in the filing.
Jefferies analyst Owen Bennett noted that what happens between Canopy (CGC) and Nasdaq could have repercussions for other Canadian LPs and US multi-state operators.
“What is very clear now, though, is that developments here now become an absolute critical watch-out, not only for Canopy (CGC) (delisting would see material downside to the stock), but broader LPs (can potentially do the same and buy US assets) and MSOs (can potentially adopt the same structure and uplist).
Image and article originally from seekingalpha.com. Read the original article here.