Marijuana News Today
The marijuana news today sees the market dealing with two massive revelations from yesterday:
1. Canopy Growth Corp (OTCMKTS:TWMJF, TSE:WEED) officially applied to have its shares listed on the New York Stock Exchange (NYSE).
2. Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB) announced that it was acquiring MedReleaf Corp (OTCMKTS:MEDFF, TSE:LEAF). The until-now rumored Aurora-MedReleaf acquisition has culminated in a $3.2-billion blockbuster deal.
Needless to say, this is big news for two of the world’s top marijuana companies.
Canopy Growth Stock News
First, let’s tackle what the marijuana news today means for Canopy Growth stock.
As I said many months back when Cronos Group Inc (NASDAQ:CRON) was the first pure-play marijuana stock to list on a major international stock market, Canopy Growth stock was probably the most likely to follow suit.
After all, Canopy Growth had been looking into getting a stock ticker on a major international exchange as far back as 2017. The announcement of the company’s plans alone was enough to boost WEED stock at the time.
Now that the company has actually accomplished its migration onto a major stock exchange, expect the new CGC stock to be one of the hotter picks when it hits the NYSE.
After all, despite the recent pullback on CRON stock, Cronos Group was able to reap several strong weeks of gains following its move onto the Nasdaq.
Canopy Growth stock is in an even better situation to take advantage of this U.S. listing due to its stronger foundations compared to Cronos, as well as its more dominant market position.
Not to mention that TWMJF stock has been one of the most internationally focused stocks around. That means the company is going to appeal to U.S. investors who are concerned that too many Canadian marijuana companies are banking on the relatively small Canadian marijuana market in order to justify their market caps.
Case in point: CRON stock lost a good bit of value due to the perception that its numbers—while strong—were not sufficient to justify its market cap.
Cronos Group has also focused on spreading its seed internationally, but, compared to Canopy Growth, it’s still a good bit behind.
Canopy Growth stock has been on fire since the company announced its move to the NYSE.
Chart courtesy of StockCharts.com
The NYSE listing has boosted Canopy Growth stock by about seven percent over the past five days. This is a huge boon, considering how static the stock was earlier this month.
Not to mention, 2018 has been a trying time for marijuana stocks, seeing stock prices across the board shrink due to a correction.
But the Canopy Growth NYSE listing is going to be a huge boon to the company, not only in the near-term, but going forward as well.
We’ve long covered how some U.S. investors are skittish when it comes to buying stocks not listed on their preferred exchanges—the Nasdaq and the NYSE.
With Canopy hitting this NYSE, it opens itself up as an investment target to a large number of U.S. investors who now have a strong marijuana company on a trusted stock exchange.
I expect big things for CGC stock in 2018, even if Canopy Growth will no longer be the largest player in the marijuana game (should the Aurora-MedReleaf acquisition proceed according to plan).
Aurora Cannabis Stock News
The next major part of the marijuana news today involves the Aurora-MedReleaf acquisition. As a result of the deal, Aurora will be the largest marijuana company by market cap.
The merger will see Aurora’s production capacity jump to 570,000 kilograms a year, deriving from nine facilities in Canada and two in Denmark. The merger will also help expand Aurora’s international presence across Europe, South America, and Australia.
“We’re not done,” said Aurora CEO Terry Booth. “Over the next couple weeks you’ll see some more activity from Aurora.” He explained, however, that it will not be on the scale of the MedReleaf deal. (Source: “Two Canadian Companies Are Merging in the Biggest Weed Deal Ever,” Bloomberg, May 14, 2018.)
Aurora has always been an aggressive player when it comes to acquisitions, with the previous largest deal in the market being its own takeover of CanniMed Therapeutics Inc.
But with Aurora now positioned as the largest marijuana company in the world, it is looking to be among the vanguard of this emergent industry.
Aurora Cannabis stock, meanwhile, is down despite the huge acquisition.
This is not uncommon, since the company being bought out is usually the major beneficiary in acquisitions. MedReleaf stock has seen a surge in value, jumping by about seven percent.
Aurora is spending a lot of money and expanding fast. While its latest quarterly report was a strong one, and the company is poised to take the marijuana market by storm, there are still fears that it is being a little too aggressive.
I ultimately believe, however, that Aurora’s decision was the right one and that the company will see a payoff for its acquisition of MedReleaf down the line.
With increased production capacity and international reach, Aurora Cannabis stock has what it needs to be a dominant force in the future of the marijuana market.
There have been two huge stories in the marijuana news today, and there has been general bullish action in the market all around.
It’s beginning to look like the summer reprieve we’ve all been waiting for has arrived, with a recovery likely to follow the deeper we dive into the season.
With Canadian marijuana legalization fast approaching, many Canadian marijuana companies are poised to see big rebounds in the coming months.
Couple that with huge moves from the industry’s biggest players, and you have what is going to be—in my estimation—a very bullish July and August.