There is a battle brewing between two of the world’s largest licensed marijuana producers and this is a development that investors need to watch.
Canada has been leading the legal medical marijuana movement taking place all over the world and this trend is just getting started. Over the last year, the country has expanded its reach and is now selling medical marijuana to countries like Germany, Australia, the Cayman Islands, Brazil, and more!
Canopy Growth Corp (WEED.TO) (TWMJF) and Aurora Cannabis (ACB.TO) (ACBFF) are Canadian licensed medical marijuana producers and the combined market capitalization of these two firms is north of $6.5 billion!
Since January 2016, Aurora Cannabis started on-boarding medical marijuana patients and the company has executed flawlessly since then. Canopy Growth was the first publicly traded Canadian medical marijuana producer and has the largest network or registered patients.
Marijuana Titans Turn To Hemp For Expansion
Earlier this year, Aurora entered a subscription and an option agreement to acquire a majority interest of Hempco Food and Fiber Inc. (HEMP.V). Aurora has been focused on capitalizing on the hemp and cannabidiol (CBD) industry and Hempco’s position within the hemp based nutrition space made it a strategic acquisition and partnership.
The market for CBD in the form of capsules, oils, and topicals is expected to show significant growth, and Aurora’s acquisition of Hempco will help the company gain significant market share in this attractive segment.
Today, Canopy Growth advanced its hemp operations after it signed a definitive agreement to acquire certain assets and intellectual property from Green Hemp Industries, a hemp farm in Saskatchewan. The transaction is a major milestone for Canopy’s hemp business and is expected to enhance the company’s vertically integrated field-scale hemp production capabilities.
In addition to acquiring Green’s farm operations and associated assets, equipment, genetic stock, and other property, Canopy Growth will operate approximately 300 acres of existing hemp production after completion of the transaction, which it anticipates will be scalable to 2,200 acres for the 2018 growing season.
Canopy to Support Growers Impacted by Larssen
After this announcement, Canopy Growth said, “following the recent announcement that the new management of Larssen intends to disrupt Larssen’s existing projects with Canadian cannabis companies that are deemed to not be in the singular best interest of the new management, Canopy Growth wishes to confirm that it has no current or intended work with Larssen.”
In fact, Canopy plans to compete with Larrsen and support any grower impacted by the new management team. The licensed medical marijuana producer will offer assistance to any cannabis company impacted by this acquisition.
A Battle is Brewing
It does not look like Canopy Growth is going to roll over and let Aurora become the world’s largest marijuana company. We are favorable on these recent moves and will keep an eye on how the company continues to execute.
credit:420intel.com
