Canadian pot producer Canopy Growth (CGC) broke out of a consolidation in early November, after President-elect Biden won the U.S. presidential election and raised investors’ hopes of nationwide pot legalization. But it continues to make aggressive cost cuts. Does that make Canopy Growth stock a buy right now?
The rally for the stock continued later in the month, as Biden’s transition formally began, even as President Trump vowed to continue challenging the results.
Biden himself has expressed support for federal decriminalization of marijuana. Vice President-elect Kamala Harris has sponsored the MORE Act, a proposed measure that would pull cannabis from the list of controlled substances. The MORE Act passed the House in December. But it has little hope in the Senate.
Full legalization would allow big Canadian pot producers to storm southward into what would be the world’s biggest legal market after struggles at home. And it would enable Canopy to fully activate the cannabis infrastructure it has been assembling in the U.S. for nearly two years.
The GOP could still hold onto the Senate, where two runoff elections in January will determine the precise makeup in the chamber. Republican control would likely narrow the road to reform. And some analysts have said investors shouldn’t get their hopes up for a Canadian rush into the states.
‘When, Not If’
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