Investors have had their eyes on marijuana stocks as the plant continues to increase in popularity. Legal marijuana is one of the only industries growing at such a high rate. In fact, cannabis research firm ArcView projected a compound annual growth of 26 percent for legal marijuana sales in North America by 2021. The growth doesn’t mean investing in marijuana stocks doesn’t come with risks. However, more dank deals are going on in the industry, which could mean more money for cannabis investors.
Recent Deals Impacting Marijuana Stocks
There have been a few major deals on the stock market involving cannabis.
One of the more popular deals was between Constellation Brands, the makers of Corona beer, and Canopy Growth Corporation. Constellation bought a 9.9 percent stake in the Canadian cannabis growing company.
And Canopy has been on the lookout for more dank deals. In fact, they’ve made deals with smaller companies both before and after their deal with Constellation.
More recently, the Canadian medical marijuana producers at Aurora Cannabis are working on the acquisition of CanniMed Therapeutics. Aurora made an acquisition proposal last week which received no response. Now, Aurora has launched an unsolicited takeover attempt.
One way these deals could impact marijuana stocks is if they lead by example.
Constellation is a member of the S&P 500 and has a market cap of $43 billion. When other companies see their investment in the legal cannabis industry, they might become curious about what they are missing out on.
Aurora’s attempt to acquire CanniMed could have been spurred by the acquisition of the largest producer of medical marijuana in Canada: Canopy. In fact, if their own acquisition of CanniMed is a success, Aurora would become the medical marijuana grower in Canada with the largest market cap size.
Another large marijuana growing company in Canada making more dank deals is MedReleaf.
In fact, the company plans to “finance the acquisition and/or construction of additional cannabis production and manufacturing facilities in Canada as well as in other jurisdictions with federal legal cannabis markets.”
Final Hit: More Dank Deals Could Mean More Dollars
As more large companies become involved with cannabis, investors will become less shy.
Most cannabis companies that are trading are small and perceived as risky to investors. As cannabis companies continue to make headlines involving deals like acquisitions and mergers, more investors will put their money on the line. One thing that will likely impact marijuana stocks more than any dank deals is Canada’s plan for legalization come July 2018.