That would allow U.S. growers to access capital markets and list their shares on the New York Stock Exchange or Nasdaq. That would allow major U.S. consumer packaged-good companies to enter the space. Altria Group (MO) and Constellation Brands (STZ) invested in Canadian growers Cronos and Canopy Growth, respectively.
“Given Democrats will be looking to address issues such as COVID, taxes and health insurance, it remains uncertain how much of a push will be made for cannabis reform—though we believe cannabis bills could also be included in a broader bill vs a stand alone bill,” he noted.
Jefferies analyst Owen Bennett wrote in a note on Wednesday that he believes existing U.S. growers are the best positioned to benefit from legislative changes, but notes that some institutional investors will need to wait until such measures pass to invest, due to the drug’s legal status.
“The value creation potential in US cannabis is a generational wealth opportunity,” he wrote. “Despite this, ownership is still heavily skewed retail. Current legislation is a key contributor here. Cannabis in the US remains federally illegal, and as such it is also not possible for US names to list on a major exchange.”
BMO Capital Markets analyst Tamy Chen wrote in a note on Wednesday notes that such legal changes would allow Canadian growers to enter the U.S. marijuana market.
She notes that the challenge for other Canadian firms would include having sufficient capital and finding the right U.S. growers.