Canopy Growth (TSE:WEED) (NASDAQ:CGC) shares have surged by almost 134% in the last month. Investor interest remains high in this cannabis and hemp products provider, driven by factors such as favorable regulatory trends, positive developments in Germany, and an endorsement from a key proxy advisor.
Promising Regulatory Momentum
While marijuana (in some form or another) is legal in multiple U.S. states, dealing with banks is still an uphill battle for cannabis companies. Last month, Senate Majority Leader Chuck Schumer pushed for the Secure and Fair Enforcement (SAFER) Banking Act. The move is aimed at boosting access to banking services for legal marijuana businesses. Additionally, Vice President Kamala Harris recently pushed for the DEA (Drug Enforcement Administration) to lower cannabis from its Schedule I classification. At present, the Controlled Substances Act puts cannabis in the same classification as heroin and above fentanyl.
Moreover, cannabis became legal in Germany this week. The legalization is expected to help Canopy Growth boost its position in the German market. Florida too is set to vote on adult-use cannabis in November. If the referendum goes through, adult-use sales of cannabis in Florida could begin in May 2025.
Upcoming Canopy Growth Shareholder Vote
Canopy Growth is planning to create a new class of exchangeable shares to advance its entry into the U.S. market. Yesterday, proxy advisor Institutional Shareholder Services (ISS) endorsed Canopy’s move, advising the company’s shareholders to vote in favor of the proposal before the April 10 deadline for proxy voting.
If approved, the strategic move could help Canopy drive its market position in the U.S. by acquiring other cannabis entities. A special meeting of Canopy’s shareholders to vote on the proposal is scheduled for April 12.
What Is the Price Target for Canopy Growth?
While Canopy Growth’s stock price is on a high, the company has reported a negative bottom line for multiple quarters now. Consequently, the Street sees a nearly 50% potential downside in the stock based on a Moderate Sell consensus rating and an average CGC price target of $3.79.
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