Marijuana is still illegal under federal law in the United States, but that is not stopping Canada’s Canopy Growth from striking a US$3.4 billion deal to tap its southern neighbor’s potential market.
Canopy, the world’s largest cannabis company in terms of market valuation, announced that it has acquired the rights to purchase Acreage Holdings for the hefty price when the substance finally does become legal.
Acreage Holdings has cannabis production and distribution operations across the US, where despite the federal restrictions many states have legalized the drug for certain uses.
Both companies apparently have a very optimistic view of just how quickly that will happen.
“We believe it takes place sooner than others anticipate – I’m going to call within the next 12 months, 18 months on the far side,” Acreage’s chairman said this week in an interview with The Financial Times.
Federal law enforcement officials, including former Trump administration Attorney General Jeff Sessions, have at times signaled a desire to crack down on con-compliance at the state level.
Nonetheless, the momentum for legalizing the substance has grown along with a dramatic shift in public views on the issue. More than 60% of Americans now say that marijuana should be made legal, versus below 20% three decades ago, according to Pew Research.
Marijuana legislation is already in the docket for the current Congress, including a bill that would protect banks that do business with cannabis-related companies. Another piece of legislation aims to de-schedule the drug and retroactively clear people who have been charged with marijuana-related crimes.
But despite growing bipartisan support for decriminalizing marijuana, it is unclear whether Republican Senate Majority Leader Mitch McConnell would be willing to bring such legislation to the floor for a vote. President Donald Trump has also been silent on the issue, calling into question whether he would sign on to the reforms.