End of federal cannabis prohibition could be near. Cannabis advocates and activists have shed blood, sweat, and tears while helping laws get passed to legalize this plant. States have adopted legal cannabis laws, but the federal government still hasn’t changed their stance. Cannabis has been illegal in the United States since 1937. California had access to medical cannabis in the 1990s, but retail or recreational access did not become legal until Colorado stepped up 2012. Even after they legalized it, it was two years before people could purchase cannabis from a dispensary legally. Dispensaries opened their doors in January of 2014. This is all great, but what is the sign pointing towards the federal government potentially ending cannabis prohibition?
Canopy Acquires Acreage Holdings
Canopy Growth is a leading cannabis producer in Canada. They have seen substantial success and are by the looks of it setting themselves up to have even more. Canopy Growth is reserving their place in the U.S. cannabis sector. They are doing so by acquiring Acreage Holdings. Media reports say this was a $3.4 billion deal. Bruce Linton, co-CEO of Canopy, stated the following in the recent press release;
“Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible pathway exists. By combining Acreage’s management team, licenses and assets with Canopy Growth’s intellectual property and brands, there will be tremendous value creation for both companies’ shareholders.”
Dig Another Layer Deeper
Big businesses are lining up to enter into the cannabis sector very quietly. It’s almost like they know something others don’t. Constellation Brands has a 37% stake of equity in Canopy Growth. If you’re not familiar with Constellation Brands, they are a popular producer of alcoholic beverages such as Modelo and Corona. So to recap… Constellation Brands owns a 30% stake in Canopy Growth and Canopy Growth will assume the Acreage properties WHEN the federal prohibition ends. Ok, so one of the world’s largest alcoholic beverage companies is going to have a 30 % stake in what could be one of the largest cannabis companies in the US cannabis market as soon as prohibition ends. Well that just makes perfect sense doesn’t it?