Canopy Growth and Safe Harbor Face Nasdaq Pressure; Cannabis Stocks Turn to Reverse Splits

Two publicly traded cannabis companies are confronting the same Nasdaq requirement: keeping their shares above $1. But Canopy Growth and Safe Harbor Financial are approaching the problem from different positions, with one seeking shareholder authorization for a potential consolidation and the other having already completed a reverse split.

Canopy Growth (NASDAQ: CGC; TSX: WEED) disclosed on October 16 that Nasdaq had notified the company of its failure to satisfy the exchange’s minimum bid price requirement. Its shares had closed below $1 for 30 consecutive business days, triggering a compliance period that runs through April 12, 2027.

Meanwhile, SHF Holdings, which operates as Safe Harbor Financial (NASDAQ: SHFS), announced on October 20 that Nasdaq had granted it an additional 180 days, through April 19, 2027, to regain compliance with the same minimum share price requirement.

The extension came less than three weeks after Safe Harbor implemented a 1-for-12 reverse stock split on September 30, combining every 12 outstanding shares into one.

The two developments illustrate the limitations of reverse splits as a remedy for depressed stock prices. Consolidating shares can increase their nominal trading price, but it does not, by itself, increase a company’s market capitalization, generate cash or improve its operating performance.

Canopy Growth Seeks Approval for a 1-for-5 to 1-for-15 Consolidation

According to an October 16 Form 8-K filed with the U.S. Securities and Exchange Commission, Canopy received its Nasdaq deficiency notice on October 14.

Under Nasdaq Listing Rule 5450(a)(1), companies listed on the Nasdaq Global Select Market must maintain a minimum closing bid price of $1 per share. Canopy has until April 12, 2027, to restore compliance, generally by maintaining a closing bid price of at least $1 for ten consecutive business days.

The company is asking shareholders to authorize a consolidation ranging from one new share for every five existing shares to one for every 15 shares. Its board would determine the final ratio and whether to implement the consolidation.

The proposal is scheduled for consideration at Canopy’s annual general and special meeting on October 23. Originally convened on September 25, the meeting was adjourned because it lacked a quorum.

Shareholder approval would give the board authority to implement the consolidation before October 23, 2027. However, the company’s Nasdaq compliance deadline arrives considerably earlier, and any reverse split intended to restore compliance must be completed at least ten business days before April 12.

Canopy cautioned that shareholder approval is not guaranteed and that a consolidation might not produce or sustain the intended increase in its share price.

The Nasdaq notice does not immediately affect trading in Canopy’s shares or its compliance status on the Toronto Stock Exchange.

Safe Harbor Completed Its Reverse Split but Still Needs to Regain Compliance

Safe Harbor provides banking, lending and financial technology services to regulated cannabis and hemp businesses through partner financial institutions.

On September 28, the company announced that its board had approved a 1-for-12 reverse split, previously authorized by shareholders in November 2025. Split-adjusted trading began on September 30 under its existing Nasdaq ticker, SHFS.

The consolidation reduced the number of outstanding common shares by approximately 91.7%, before adjustments for fractional holdings. Shareholders otherwise entitled to fractional shares received their holdings rounded up to the nearest whole share.

Nevertheless, Safe Harbor’s October 20 announcement confirmed that the company had not regained compliance during its initial Nasdaq compliance period, which expired October 19.

The company had first received a deficiency notice on April 22, 2026.

Nasdaq subsequently granted a second 180-day period because Safe Harbor satisfied the applicable requirements for an extension, apart from the minimum bid price threshold.

Safe Harbor said it would continue evaluating its options, including another reverse split if necessary, before the April 19, 2027 deadline.

Its shares remain listed on the Nasdaq Capital Market while the company works to resolve the deficiency.

What Reverse Splits Mean for Cannabis Investors

Although both companies are addressing Nasdaq listing deficiencies, their situations are not identical.

A reverse split changes the number of shares outstanding and the price represented by each share, but it does not automatically change the proportion of the company owned by an investor.

For example, an investor holding 1,200 shares at $0.50 each would own 100 shares at a theoretical $6 each following a 1-for-12 consolidation. The investment would still be worth $600 immediately after the adjustment, assuming no other price changes or fractional-share effects.

The more consequential question is whether the higher nominal price can be sustained.

Safe Harbor’s situation provides an immediate example. Despite implementing a consolidation in September, the company still required additional time from Nasdaq in October. Its latest SEC filing also leaves open the possibility of another reverse split.

Canopy, meanwhile, must first secure shareholder approval and decide whether to implement the consolidation. Even if approved, the company could face renewed pressure if its shares decline after the adjustment.

For investors, the distinction between satisfying an exchange’s listing standards and improving a company’s financial performance is important. A reverse split may address the former without resolving the latter.

Both companies now face April 2027 deadlines, although Canopy has an earlier shareholder decision approaching on October 23.

As cannabis companies navigate capital market pressures, Nasdaq listing requirements, and the challenges of maintaining shareholder value, executives and investors will have an opportunity to discuss the industry’s financial outlook at IgniteIt’s Capital & Policy Summit in Washington, D.C., on November 18. The event will bring together cannabis industry leaders, policymakers, and financial professionals to examine capital allocation, regulatory developments, and the investment environment shaping the sector’s future.