Cannabis stocks rally as Canopy secures future foothold in the U.S.

Cannabis stocks rallied on Thursday, boosted by the news that the biggest company in the sector by market cap has bought the rights to acquire a U.S. multistate operator as soon as the federal ban on cannabis has been lifted.

Canopy shares soared more than 8% after it confirmed the deal, which MarketWatch reported on late Wednesday. Once the rights have been exercised, the deal will be valued at $3.4 billion, a 41.7% premium over the 30-day volume weighted average price of the Acreage subordinate voting shares on the CSE ending April 16, Canopy said in a statement.

Canopy would also have to give up its U.S. listing, which was cross-listed from the TSX, and instead look to the Canadian Securities Exchange and over-the-counter trading in the U.S., as publicly-listed U.S. companies do. The deal also shows that Canopy is driving real value from its Constellation investment, which is key given the difficulty facing cannabis companies in tapping the capital markets, he wrote. Bennett has a hold rating on Canopy stock.

“The company is also among the best connected politically, with the Board of Directors including former Speaker of the House John Boehner and a current candidate for the Republican nomination for President of the United States,” they wrote in a note. That candidate is William Weld, the Republican former governor of Massachusetts, who has confirmed his plan to challenge President Donald Trump in the 2020 primary.“These relationships will likely prove helpful in pushing for a change in U.S.

For more, see now: Greenlane IPO: 5 things to know about the closest thing to a U.S. cannabis company to go public on NasdaqElsewhere in the sector, Cronos Group Inc. CRON, +2.26% CRON, +2.35% was up 3.5%, Aurora Cannabis Inc. ACB, +1.23% ACB, +1.09% was up 1.0%, and Tilray Inc. TLRY, -2.45% was down 1.0%.

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