Marijuana News Today: U.S. Marijuana Companies Eye Global Expansion

Willy Nelson: Marijuana News Today
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Marijuana News Today

The marijuana news today concerns what I believe will be a rapidly growing trend in the cannabis business, namely the listing of U.S. marijuana companies on Canadian exchanges in order to expand globally and skirt draconian U.S. marijuana laws.

Willie Nelson and his recreational pot brand is looking to expand north of Colorado into Canada, with the intention to list publicly in Toronto. LivWell Enlightened Health LLC is undertaking a series of deals that would see the company eventually list on a Canadian stock exchange. (Source: “Willie Nelson’s marijuana brand is said to be coming to Canada,The Globe and Mail, July 23, 2018.)

Part of the deal involves taking over management of a Calgary-based cannabis company and a reverse takeover of investment company Target Capital Inc (CVE:TCI).

The name of the company would then change to LivWell International to reflect its expansion across the border. The move would bring “Willie’s Reserve,” the famous U.S. artist and well-known weed enthusiast’s eponymous brand, to Canada.

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The move would not only allow LivWell to access markets beyond Colorado—something that U.S. federal law currently prevents—but would also open the company up to a great injection of capital as a result of it being on a public market, something many U.S. marijuana companies are unable to access.

LivWell is projected to have a value of about $228.0 million when it goes public. The company, run out of Denver, Colorado, has about 500 employees and rakes in about $80.0 million in annual sales from marijuana.

The move means much more to the marijuana industry than just another marijuana company entering the public market. It speaks to a larger trend that I believe will only grow in popularity—the trend being U.S. marijuana companies listing on Canadian exchanges as a workaround to avoid American pot laws.

Not to mention that the U.S. market is largely closed off to retail investors due to the federal drug ban. Investors are therefore unable to access a lucrative pot market and are instead relegated to investing in primarily Canadian pot companies.

While Canadian pot companies are the strongest in the industry and have footholds across the globe, not being able to gain exposure to the highly-profitable American cannabis market is obviously not a good thing for investors, or for companies.

But moves like the one being undertaken by LivWell present a way to overcome all of those obstacles, giving the company access to investment capital while allowing investors to gain exposure to the lucrative U.S. marijuana market. It’s a win-win model that I expect many companies will follow, should the LivWell expansion prove successful.

Tilray Stock News

The marijuana news today on the stock market is a tale of two radically different stories, one of overnight success and another of longer-term malaise.

Starting with success, Tilray Inc (NASDAQ:TLRY), the first marijuana IPO on the Nasdaq, has continued to explode upward. Tilray stock is up almost 84% since the company went public on July 19.

While I don’t expect TLRY stock to keep those gains without a correction eventually, the company is up in early morning trading today by another eight percent.

The key takeaway from the success of Tilray is that there is a massive hunger in the market for marijuana stocks in general. The TLRY stock IPO reveals just how much investors want a piece of this cannabis pie.

I do imagine there will be a drawback eventually, as the growth rate is simply unsustainable, but for day traders there is a lot of money to be made on Tilray stock right now if you play your hand right. I believe we’ll see at least a few more days of gains out of TLRY stock, making it an alluring prospect to the right buyers.

Aurora Cannabis Stock News

On the other side of the equation, we have Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB).

Chart courtesy of StockCharts.com

Aurora Cannabis stock is down double-digits over the past two weeks, dropping six percent over the last week and having fallen 27% over the past month.

While early morning trading has Aurora Cannabis stock up about two percent, this longtime favorite of the industry has indeed fallen on hard times.

And that’s despite Aurora hoping to gain a boost as it closes in on its MedReleaf Corp (OTCMKTS:MEDFF, TSE:LEAF) acquisition, the biggest buyout to ever take place in the marijuana industry.

The industry-wide pullback is largely to blame for ACB stock’s woes, but more concerning is that despite a recent spate of good news coming out in favor of the Aurora, it has been unable to turn its stock fortunes around.

Analyst Take

The marijuana news today is, on the whole, positive for the future.

The LivWell IPO, if successful, will likely open the floodgates to a number of other U.S. companies seeking access to investor capital. And this can only be a good thing for the marijuana market more broadly.

Tilray stock’s astounding performance is also another great sign that cannabis is still the same exciting market it’s been for the past couple of years now.

The massive growth out of TLRY stock shows just how much interest there is in the marijuana industry. Hopefully, we’ll see more companies follow suit and list on major U.S. exchanges.