The primary catalyst for Canopy stock's rise last month was the company's announcement on April 18 that it was buying the rights to acquire Acreage Holdings (NASDAQOTH:ACRGF), a U.S.-based cannabis producer. The deal involves Canopy paying $300 million up front for the right to acquire Acreage for $3.4 billion if and when the U.S. federal government legalizes marijuana.
"Today we announce a complex transaction with a simple objective. Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally permissible pathway exists," Canopy Co-CEO Bruce Linton said in the press release.
While medical and/or recreational marijuana is legal in many U.S. states, Canopy can't currently enter those markets because the exchanges its stock are listed on (New York Stock Exchange, or NYSE, and Toronto Stock Exchange, or TSX) prohibit their listed companies from engaging in any enterprise that is illegal on a federal level.