Marijuana News Today: ACB Acquisition Sends Stock Soaring

Marijuana News Today
iStock.com/HighGradeRoots

Marijuana News Today

We have two strong headlines in the marijuana news today; one being Aurora Cannabis Inc (NYSE:ACB) not missing a beat since 2018 with another acquisition, and the other being an increase in funding for marijuana research pouring in post-legalization.

Let’s start with the softer news and then get to the Aurora acquisition.

Obviously, marijuana research was not a priority for governments or businesses when it was still an illegal substance.

That has, by and large, changed since it was legalized, with millions of dollars pouring into research from both the private and public sectors.

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In Canada, companies like Canopy Growth Corp (NYSE:CGC) are spending healthy doses of cash to find better ways to cultivate and develop more profitable marijuana strains. (Source: “Legalization sparks boom in once-stigmatized field of marijuana research,” CTV News, January 14, 2019.)

From the government side of things, you have provinces across Canada contributing money to marijuana research at a much higher clip than we’re used to.

All this has served to create a much friendlier environment toward marijuana, and one that could lead to breakthroughs as time goes on.

After all, the company that can develop the most novel and innovative marijuana growing techniques is going to have a natural competitive advantage over its rivals—not to mention that Canadian marijuana stocks, by virtue of their value, will likely have a leg up on the competition due to the free flow of capital.

This will mean that Canada could lead the marijuana industry for decades to come, and makes those Canadian marijuana stocks more desirable than ever.

It is worth noting, however, that Canada isn’t alone in its marijuana research.

If you’ve been keeping up to date with our “Marijuana News Today” columns, you’ll know that Tilray Inc (NASDAQ:TLRY) received approval last year to import cannabis as a study drug at the University of California San Diego Center for Medical Research.

This marked one of the first times we’ve ever seen the U.S. open its borders to marijuana imports and relax the laws concerning pot research.

The takeaway is that evolution and innovation are going to drive the marijuana sector in the coming years, and pot research will play a huge part in determining which stocks emerge on top.

ACB Stock

As promised, the marijuana news today will also cover what is perhaps the most pressing issue in the industry: Aurora Cannabis Inc’s acquisition  of Whistler Medical Marijuana Corp.

The all-stock deal is worth CA$175.0 million and includes milestone payments.

Aurora is looking to expand its production capacity—a vital factor in marijuana stock success—with its acquisition of Whistler. The acquired company is expected to have a total production capacity of over 5,000 kilograms per year when its second location reaches full capacity. (Source: “Aurora Cannabis buying Whistler Medical Marijuana in deal worth up to $175M,” Global News, January 14, 2019.)

The deal is very much in keeping with what Aurora did in 2018, which is to say, be quick on the draw when buying up smaller companies.

You’ll remember that, among its smaller deals, Aurora purchased MedReleaf Corp in a blockbuster deal that sent MedReleaf stock soaring.

Aurora has since been very hungry to gobble up competitors in an attempt to rival its larger competitors in size.

While the acquisitions were, for the large part, hit and miss in 2018 in terms of immediate stock impact, this deal seems to have resonated well on the pot stock market.

ACB stock climbed 5.5% in early-morning trading today, while it’s up 24% over the past five days as the cannabis stock market experiences a healthy surge.

Another important aspect of Aurora: while it has been busy acquiring companies, it has yet to nail down a major partnership with Big Tobacco or Big Alcohol, putting it behind its competitors.

While at times the company had been linked to possible major deals, none materialized.

The Coca-Cola Co (NYSE:KO) was reportedly in talks with the cannabis company to develop beverages, but those talks have yet to lead to a concrete deal.

TLRY Stock

While Aurora may have sucked up the headlines today, it is TLRY stock that has been seeing the biggest movement in share price.

Tilray stock surged by nearly nine percent in early-morning trading today, and it is up about 42% over the past five days.

The huge rally has a number of causes (many of which we covered last week), but overall, Tilray stock is in a very strong position.

Not to mention that Tilray announced it would be looking to launch a new cannabis edible product in Q4 of this year as regulation regarding cannabis edibles is instituted in Canada. (Source: “IntelGenx and Tilray on go with Q4 launch of cannabis-infused oral film,” Seeking Alpha, January 14, 2019.)

This would provide Tilray stock yet another strong entry into the burgeoning marijuana market and help maintain its status as an industry leader.

ACB and TLRY Stock Performances

The performances of ACB stock (black line) and TLRY stock (blue line) over the past week are seen on the chart below.

Chart courtesy of StockCharts.com

Analyst Take

It’s rose petals all around in the marijuana news today, with strong stock performances to start the week and the marijuana industry’s future looking bright.

ACB stock has surged following Aurora’s most recent acquisition. Meanwhile, TLRY stock continues to impress with its outlook in 2019.

And finally, research is opening a promising avenue of development for the marijuana industry.

All in all, it’s a great day to be marijuana stock bull.