Even as analysts continue to increase their estimates of the actual size of the nascent marijuana market, players from the main sector continue to jockey for position within that market. It appears that the pace of joint venture announcements and mergers and acquisitions has escalated on both sides of the Canada-US border, while participants are trying to deploy their claims in the recreational, medicinal and edible cannabis segments
And with every new announcement, investors' reactions become more intense – pushing the needle higher on stock prices of pots. The fluctuations are sometimes dramatic, often temporary, but always remarkable. These reactions only contribute to the crazy sentiment in this sector. Indeed, observers are no longer waiting to see which deal will be announced next, but are trying to move forward by determining which company can take the next step.
Add to this that such fundamental motivations as US Attorney General William Barr's remarks when he told Congress last week that he found the situation "intolerable" that all different forms of marijuana are still illegal at the federal level, but a growing number of states are legalizing it, suggesting a mitigation of the federal government's attitude.
It is therefore important for investors to anticipate the fundamentals, at least by knowing which companies are about to color deals, not to mention profit. After all, every new agreement has the potential to influence stock prices in the near, medium and longer term.
Here are three companies to watch in the coming months, according to industry analysts and observers.
1. HEXO Corporation
HEXO Corp. located in Quebec. (NYSE :), (TO 🙂 "could be busy on the merger and acquisition front in 2019," said Michael Berger, founder of Technical 420, who specializes in research and analysis of cannabis supplies. . Indeed, last month it acquired another Canadian marijuana company, Newstrike Brands (V :), in an all-stock deal worth C $ 260 million ($ 195.04 million USD).
Some speculate, according to published reports, that HEXO could be in conversation with American companies such as the Campbell Soup Company (NYSE :).
HEXO Weekly YTD
On Friday, HEXO shares on the NYSE closed at $ 6.30, an increase from the closing price of $ 6.20 on the previous day. The stock has won 84% since the beginning of the year. The company has a market capitalization of $ 1.32 billion.
2. The Green Organic Dutchman Holdings
The Green Organic Dutchman Holdings Ltd (OTC :), (TO 🙂 is considered a world leader in organic cannabis, has swapped a little less than a year after having last raised $ 132.26 million ($ 99.22 million USD) in May in its first public offering, the largest IPO of Canadian cannabis to date.
TGODF Weekly YTD
The Ontario-based company currently has growing operations in Canada, Europe, and the Caribbean. It also recently signed a distribution agreement with Velvet Management, a division of Canada's largest wine distributor, Philippe Dandurand Wines, for the sale and distribution of its products to provincial spirits and cannabis shelves throughout Canada
The company also has plans to build a 40,000 square meter research and development center with space to develop new products, including cannabinoid infused drinks. It could be prepared to write a few more deals in the coming months.
The shares of The Green Organic Dutchman closed on the US OTC market last Friday at $ 3.15, giving it a market capitalization of $ 9855.37. The stock is currently trading around halfway between its highest point of $ 7.79 ever and its lowest price of $ 1.60.
3. Aurora Cannabis
Perhaps the most likely candidate to announce an important deal is the Alberta-based Aurora Cannabis (NYSE :), (TO :). It is one of the largest marijuana companies in Canada, with a specialty in medicinal cannabis.
What sets Aurora apart from the other big boys in the industry is that it has announced another major partnership agreement with a mega-cap American firm operating in one of many industries – for example, pharmaceuticals, beverages, and consumer crops – that are all ready for disruption due to the legalization of marijuana. Investors, however, bet quickly.
Aurora Weekly YTD
Last month, the company hired activist investor Nelson Peltz as a strategic advisor. Shares jumped more than 13 percent on the news. His deal with the company gives him the opportunity to buy 20 million common shares, a move that could make him the third-largest shareholder in Aurora.
In a statement about the appointment of Peltz, Aurora said he:
"Work together and strategically to explore potential partnerships that would be the optimal strategic fit for successful entry into each of Aurora & # 39; s targeted market segments."
In addition, he will advise on his continued global expansion.
The Aurora stock closed on Friday at $ 8.88. The shares have risen more than 38% since the beginning of the year. The company has a market capitalization of $ 8.85 billion.
