The steep weed stock market slump that began mid January has been noted in recent posts (Read Cannabis Stocks Still Strong for the Long Term, Despite Recent Losses for more information), in what some see as an expected market correction.
But good news for marijuana stock investors is pouring in.
Cannabis stocks are on the rise again, and one company in particular is wowing the industry with brilliant tactical moves, again and again.
For some time, the giant dominating the cannabis industry has been Canopy Growth Corp. But, Canopy has stiff competition, and some might say that competition may take the lead at the rate its expanding.
Not surprisingly, for marijuana stock investors who have been closely following the up and down trends, Aurora Cannabis Inc. is the competitor that has been captivating the industry with the most headlines this year. Almost daily, announcements roll in of a new acquisition, new strategic business initiative or new partnership with Aurora. The business leadership appears determined to take advantage of Canada’s full legalization of pot this summer, working with strategic foresight to ensure the company is well positioned for the predicted growth. The latest strategic move was just announced and, at first glance, might seem counter-intuitive.
Ever-popular marijuana stocks company, Aurora, purchased a minority stake with Liquor Stores, based in Alberta, Canada.
As the name implies, Liquor Stores is a chain of retail stores, operating more than 200 stores across Alberta and British Columbia, with a few stores in the U.S.
The deal means that the Liquor Store is now entering the marijuana industry. With money received from Aurora, the Liquor Store will be reconfiguring their retail stores to accommodate the sale of Aurora’s marijuana products, in addition to opening some of their own retail marijuana stores across Canada.
So why would two competitors for recreational drugs – marijuana and alcohol – team up?
Upon closer inspection, it’s a symbiotic deal for both companies in respect to alcohol and cannabis stocks and sales.
For Liquor Stores, it’s a well-played preemptive move. The company acted in anticipation of how marijuana legalization is likely to impact the alcohol industry, leveling the playing field between the two industries.
Given the free choice between alcohol and legal recreational marijuana, Canadians may be more likely to choose marijuana in the future. Studies have indicated over the past year how a growing number of consumers who drink alcohol may switch to weed when given the legal choice. Therefore, instead of losing ground to marijuana companies after legalization, the Liquor Company decided to find their own place in the weed industry ahead of the changes.
For weed stock investors in Aurora, it’s encouraging to know the deal will allow the company to establish a strong base across the west coast of Canada.
In contrast to Canada’s eastern provinces and Ontario, where liquor stores are government-owned, the western province of Alberta (Liquor Store’s base) will allow privately-owned stores to sell over-the-counter marijuana. Aurora, based in Vancouver, B.C., is building a massive facility for pot production in Alberta – Aurora Sky – and it’s here that Aurora expects the largest market. With access to Liquor Store’s 200+ retail stores, Aurora will establish a larger presence across Canada.
Or in the words of Aurora’s CEO, Terry Booth, the partnership between the two companies will allow them “to establish a leading private retail footprint in Western Canada.”
This, among other strategic moves, makes Aurora Cannabis one of the top weed stocks to invest in, according to analysts.
To date, Aurora is the one and only marijuana company with production facilities on both coasts of Canada. They recently closed the deal on their acquisition of CanniMed Therapeutics Inc., a medical cannabis company in Central Canada. On the east coast of Canada, they already have two production facilities and a recently purchased stake in a third – The Green Organic Dutchman.
With such strategic geographic growth, it is worthwhile for pot stock investors to keep a close watch on the moves of this company.
(To read more on Aurora’s expansion, read Huge Potential Merger in the Cannabis Industry Could Shake Things Up for Marijuana Stocks in 2018.)