More Positives for Pot Stocks: Two Big Marijuana Mergers this Week

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The cannabis industry has not been lacking in activity and big weekly announcements, and this week is no exception. Here is last week in review, in case you missed any pertinent cannabis-related news.

In headlining news, marijuana stocks company, Aurora Cannabis, acquired a 20% stake in Liquor Stores N.A. Ltd for $103.5 million.

Partnering with Liquor Stores, a fellow Canadian business based in Edmonton with more than 200 retail stores across Alberta and British Columbia, will help Aurora expand its footprint across Canada and even into the U.S. This acquisition also allows Aurora to gain a toehold in the retail end of the market, particularly as Canada moves toward its recreational marijuana legalization date.

(For more on this acquisition, read Buying Into Booze: Top Cannabis Stock Aurora Closes Deal with Big Liquor). 

Those seeking marijuana stocks to buy now were temporarily deterred by the Canadian government’s appearance to backslide from the legalization schedule.

The middle of last week stirred confusion and anxiety in the industry as Canada’s federal ministers indicated a delay in the probable date for recreational marijuana sales to begin. The timeline is looking more like a rollout at the end of summer or early fall rather than what was largely assumed to be a start date in July. If this is the case, individual companies, the industry and marijuana stocks investors are looking at inevitable losses.

One silver lining amidst this announcement for marijuana stocks Canada investors was a decision from the Canadian Service Administrators (CSA) to maintain current policy, protecting Canadian marijuana companies operating within the U.S. from punishment.

(To read more on these stories, check out Top News for Marijuana Stocks for Early February.) 

Marijuana stocks in Australia may experience a boost in market potential thanks to a Canadian company’s expansion.

Big news came Monday of last week when Cronos Group Inc. revealed they are launching an Australian counterpart of the company through a 50/50 partnership with NewSouthern Capital Pty Ltd.

In a press release, the company stated that “Cronos Australia will serve as the Group’s hub for Australia, New Zealand and South East Asia, bolstering the Group’s import/export supply capabilities and distribution network.”

Cronos Australia will find its start in the construction of a 20,000 square foot production facility, which will enable them to produce 2,000 kg of cannabis per year. Until the facility is complete and cultivation can begin, Cronos Australia will receive its cannabis supply from its parent company in Canada, subject to obtaining an import license.

Another merger between alcohol and marijuana stocks companies lights up prospects for investors.

Last Friday, MedReLeaf Corp and Toronto-based Amsterdam Brewing Co, announced their own clever cross-country partnership with a launch of a new brand, San Rafael ’71. This brand will encompass their recreational cannabis products, referred to as “4:20 pale ale,” and will be available at bars and Beer Store locations in the Greater Toronto area.

It must be noted that the beer itself will not contain cannabis; recreational marijuana still awaits legalization and even more so for cannabis drinks. However, MedReLeaf’s marketing of the new brand will help raise brand awareness and bolster positive consumer support for future cannabis-based products launched by the San Rafael ’71 brand.

Marijuana stocks company mergers and fundraisers lead headlines for marijuana stocks news during early 2018.

Also in weekly updates, following Invictus MD Strategies Corp’s announcement at the beginning of the month of an investment in AB Laboratories Inc, the company was finally able to close the deal last week. With this investment finalized, Invictus raised its ownership stake in AB Laboratories to 50% and will allocate $10 million towards expanding the already-existing AB Labs facility, increasing production space to roughly 56,000 square feet.

On Thursday last week, Tilray, a private medical marijuana stocks company based in Seattle, announced $60 million raised in fundraising efforts that will be used to expand Tilray’s international footprint. In addition to Seattle-based Privateer Holdings, the company currently has production facilities in British Columbia and Portugal, contracts for distribution with several countries in the EU, and serves Australian, Canadian, Latin American, New Zealand and EU markets. Between several recent fundraising rounds, the company’s private capital sits at $200 million USD.

Finally, in exchange-traded fund news, a new fund was listed on the Toronto Stock Exchange – Evolve Marijuana ETF (SEED). This new ETF is one of only two current actively managed cannabis ETFs, second to the Marijuana Opportunities Fund, listed on February 1 by Redwood Asset Management. These two funds benefit greatly from the popularity of the Horizons Marijuana Life Sciences Index ETF, a passively managed fund which has grown to passive management of $700 million since its launch last spring.

(For information on ETFs, read More Options for Canadian Marijuana Stocks as Another ETF Opens). 

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