Canopy Growth stock pops premarket after it revises proxy statement on move into US market to comply with Nasdaq listing rules

Canopy Growth Corp.
CGC,
+3.81%

WEED,
+2.84%
said Monday it has filed a revised proxy statement with the U.S. Securities and Exchange Commission updating its strategy to accelerate entry to the U.S. cannabis industry through a U.S.-domiciled company called Canopy USA LLC. The company has modified the structure of its interest in that company in order to ensure continued compliance with Nasdaq listing rules, it said in a statement. The move comes after Nasdaq last October objected to a plan to consolidate Canopy USA’s earnings into its financial results. Canopy said it will now modify the structure to that it holds no more than 90% of Canopy USA, will adjust the composition and nomination rights of Canopy USA’s board of managers, and make other amendments. The changes mean it will no longer require the consolidation of Canopy USA’s numbers into its results. “Canopy USA is a novel strategy designed to capitalize on a once-in-a-generation market opportunity,” CEO David Klein said in a statement. “We are pleased to have found a path forward that enables us to stay within NASDAQ’s listing requirements, while preserving the meaningful value associated with this plan.” The U.S.-listed stock rose 3.7% premarket on the news, but is down 53% in the year to date, while the AXS Cannabis ETF
THCX,
-0.73%
has fallen 26% and the S&P 500
SPX,
-0.14%
has gained 9%.