Beyond the Bong: Aurora Cannabis Uplists to U.S. Exchange and Other Cannabis News
This is individual research and does not constitute investment advice.
The global cannabis industry is exploding.
We’ve said it before, and we’ll say it again: Last week’s launch of recreational sales in Canada was just the first step.
And more and more investors are waking up to this fact.
There’s a race underway to keep up with the latest news. And interested investors are on the hunt for areas they need to keep an eye on, including companies that might be good for them to consider.
To help out, we’ve launched “Beyond the Bong.” This is a new mailing that will go out every Monday morning.
And it’s dedicated to covering the cannabis industry and pot stocks.
We’ll highlight recent cannabis news…
We’ll touch on what investors need to know for the week ahead.
And we’ll give you some companies worth watching, related to all of the above.
Additionally, you’ll start to hear from us four days a week, with the addition of a Thursday mailing. This means you’ll get more news and more insights that you won’t find anywhere else.
So, without further ado…
The Highs of Uplisting
As we covered in Saturday’s piece on the five takeaways from marijuana’s first recreational sales in Canada, one of the biggest news events in the cannabis industry heading into this week is the uplisting of Aurora Cannabis (OTC: ACBFF).
Starting tomorrow, shares of Aurora will begin trading on the New York Stock Exchange (NYSE) under the ticker “ACB.”
This is another important milestone for the industry.
Aurora joins fellow Canadian licensed producers listed on major U.S. exchanges – Canopy Growth Corp. (NYSE: CGC), Cronos Group (Nasdaq: CRON) and Tilray (Nasdaq: TLRY).
And those numbers may be growing.
Aphria (OTC: APHQF) has filed its Form 40-F to be listed on the NYSE. Though there’s no indication what symbol it will use since “APH” is already taken.
And Aleafia Health (OTC: ALEAF) has filed its Form 40-F to be listed on the Nasdaq.
Plus, Namaste Technologies (OTC: NXTTF) has had its application in for a while.
So U.S. listings for Canadian cannabis producers are quickly growing.
To think, before Cronos Group was approved by the Nasdaq earlier this year, there were no cannabis producers trading on major U.S. exchanges.
But as demand for cannabis stocks skyrockets with increased legalization, U.S. exchanges will move to meet that investor hunger.
Yes, those first legal recreational sales in Canada last week marked a historic moment for the cannabis industry.
But don’t think the industry’s American counterparts didn’t make history in their own right.
Two U.S. players just got bigger.
Last Thursday, MPX Bioceutical Corp. (OTC: MPXEF) and iAnthus Capital Holdings (OTC: ITHUF) announced they were merging.
This is the first-ever public-to-public merger transaction in U.S. cannabis industry history.
In addition, the newly formed $835 million entity will spin off all of its non-U.S. assets under the umbrella MPX International. This new venture will apply to list on the Canadian Securities Exchange.
MPX is already a multistate, vertically integrated operator in the U.S. But for iAnthus, which posted less than $500,000 in revenue in September, the merger means that it nearly doubles its national footprint.
In fact, MPX and iAnthus’ combined revenue for last month tops US$5.25 million.
The merged company will have 56 retail operations and 14 cultivation and processing facilities in 10 states. That gives it an addressable market of 112 million people. And those 10 states are projected to generate $16.2 billion in annual cannabis sales by 2022.
As MPX CEO Scott Boyes put it, “The nascent U.S. cannabis market is still in a land-grab phase.”
In other U.S. cannabis news, British Columbia CBD-focused Integrated Cannabis Company (OTC: ICNAF) acquired Colorado cannabis company Critical Mass Industries LLC.
We recently wrote about how mergers and acquisitions are going to heat up.
And some of the easiest, most effective targets for big licensed producers right now are CBD companies.
The CBD market in the U.S. alone is projected to see explosive growth over the next four years. And major players are making big splashes. But these businesses by themselves are quite attractive, especially if the U.S. CBD market explodes to $21 billion by 2021.
This Measuring Stick Just Got Bigger
Horizons Marijuana Life Sciences Index ETF (TSX: HMMJ; OTC: HMLSF) is the first and largest ETF dedicated to the North American marijuana industry.
It’s an easy, one-stop shop for those looking to invest in a broad range of cannabis companies.
And it serves as a measuring stick for the industry.
At the end of September, the ETF announced it had added nine new constituents:
- Aleafia Health (TSX: ALEF)
- Choom Holdings (CSE: CHOO)
- Eve & Co. (TSX: EVE)
- GTEC Holdings (TSX: GTEC)
- FSD Pharma (CSE: HUGE)
- James E. Wagner Cultivation (TSX: JWCA)
- Namaste Technologies (TSX: N)
- Indiva Ltd. (TSX: NDVA)
- Tilray (Nasdaq: TLRY).
The ETF now has 49 holdings and more than $1 billion in assets under management. A major milestone for any ETF, let alone the marquee cannabis one.
The largest holdings in the Horizons ETF are Aurora (13.43%), Canopy (11.42%), Tilray (11.05%), Aphria (9.95%) and GW Pharmaceuticals (Nasdaq: GWPH) (7.36%).
That’s it for this edition of “Beyond the Bong.”
We’re barreling headlong into earnings season. Next Monday we’ll cover the dates and expectations that all cannabis investors need to know.