Why Rescheduling Might Not Move Canopy Growth's Stock as Much as You Think

The United States is slowly moving toward the legalization of marijuana.

The next big step is the rescheduling of the drug at the federal level, which won't make it legal, just less illegal.

Canopy Growth's business won't be dramatically impacted either way.

Canopy Growth (NASDAQ: CGC) is one of a handful of marijuana stocks that were all the rage early on as investors thought pot would be a huge growth market. Pot demand has grown dramatically, but marijuana stocks didn't live up to the early hype. But will that change if the classification of marijuana changes at the Federal level in the United States? Not for Canopy Growth, here's why.

Marijuana has been legal to use in an increasing number of states. Some have focused on medical use, while others have gone all the way to legalizing recreational use. That opened the way for companies to grow and sell marijuana.

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There was just one problem. Marijuana is also regulated at the Federal level. For a long time, marijuana was considered to be in the same category as heroin. Now, however, the drug has been rescheduled, putting it in the same classification as acetaminophen, an over-the-counter pain medication. While pot is still regulated, the marijuana industry's path forward is much clearer. That could open up more opportunities for growth for marijuana companies in the U.S. market.

Canopy Growth is a pot stock, so in the big picture, rescheduling is good news. However, Canopy Growth's core operations are in Canada and Europe. With regard to the U.S. market, the company's annual report explains: