A U.S. Senate vote in favor of the SAFE Banking Act that would allow banks to serve cannabis companies without fear of federal enforcement actions would not present a triggering event for Canada's Canopy Growth Corp. /zigman2/quotes/200603886/composite CGC +7.82% /zigman2/quotes/202205609/delayed CA:WEED +7.41% to acquire Acreage Holdings Inc. /zigman2/quotes/205165963/composite ACRGF +1.37% , MKM Partners analyst Bill Kirk wrote on Thursday. The SAFE Act won approval in a House vote on Wednesday and is expected to head to the Senate, where passage is far less certain, Kirk wrote in a note to clients. "We believe partisan lines have likely become more rigid following the impeachment inquiry, and U.S. Senate Majority Leader has spoken out against cannabis in favor of hemp," Kirk wrote. However, even if it did pass, "as currently written," the bill would more likely benefit smaller operators, rather than the bigger, publicly traded and better resourced cannabis players, he wrote. Canopy has the right to acquire Acreage as soon as U.S. cannabis laws have eased, under an arrangement struck last year that has allowed it to share IP with the U.S. multi-state operator. Kirk did not provide further comment on the issue, but the analyst rates Canopy as neutral, and has a buy rating on Acreage. Canopy shares were up 4% premarket, with most cannabis stocks trading higher after the House vote. The ETFMG Alternative Harvest EFT /zigman2/quotes/204332491/composite MJ +2.70% was up 2.6%, but remains down 11% in 2019, while the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.27% has gained 19%.
Read the full story:
Cannabis stocks mixed as euphoria over banking bill fades in face of tricky Senate