Legislators could soon reach an agreement to legalize recreational cannabis in NYS. Meanwhile, Canadian cannabis companies are trying to pave their way into the US
A bill to legalize it could be passed by the Senate as early as next week. Specifics such as the number of plants that can be grown in private households and identifying driving disorders in people who have consumed marijuana are still being discussed. (1)
How has cannabis legalization in New York affected Canadian cannabis populations?
Many top Canadian stocks rose this Monday as the New York legalization deal progressed.
Tilray was the biggest engine, with shares rising 12% from 12:24 p.m. PST. Aurora Cannabis stocks rose 5.1%. Canopy Growth and Hexo weren’t far behind. Shares rose 4.1% and 4.5%, respectively, on news of cannabis legalization in New York. (2)
However, Canadian cannabis producers can only enter the U.S. market if the federal government legalizes and decriminalizes cannabis use. This can potentially happen in the near future as more U.S. states legalize recreational cannabis. (3)
Canadian manufacturers are preparing to enter the US market
In a recent March 11 press release, Organicgram Holdings Inc. (OGI) announced its $ 221 million strategic development plan and interest in expanding into the US as a subsidiary of British American Tobacco (BAT) Almost 20 percent of their stake acquired for $ 126 million. (4)
The investment shows BAT’s interest in venturing beyond the current tobacco business into cannabis and promises OGI’s entry into the US market in the coming days. The companies also signed a Product Development Collaboration Agreement (the “PDC Agreement”).
The move could accelerate its R&D program and product development activities and strengthen its ability to enter the US and other international markets. OGI’s stocks have been on an uptrend in the past few weeks, although growth has been a rocky road.
A similar announcement was made by Fire & Flower Holdings Corp in February 2021 when it entered into strategic agreements with a private Canadian company that acted as American Acres Managers. The deal included an agreement to license the Fire & Flower brand, the store’s operating system, and the Hifyre ™ technology platform for pharmacies in California, Arizona and Nevada. (3)
The agreement gives Fire & Flower the option to purchase American Acres at a discount to fair market value. The acquisition can be made after the federal legalization of adult cannabis in the USA (3).
When Aurora Cannabis Inc. agreed to buy Reliva, a US-based CBD company, in 2020 to enter the US cannabis market, shares rose nearly 13 percent. (5)
After all, all hopes rest on the federal legalization of cannabis in the United States. The news is promising for New York State. “I’m optimistic it will be resolved sooner rather than later,” @ZackFinkNews tweeted of @ NY1 News on March 16, 2021.
Reisman, Nick. “Deal is about to legalize marijuana in New York.” Spectrumlocalnews.com, March 16, 2021, spectrumlocalnews.com/nys/central-ny/ny-state-of-politics/2021/03/16/deal-nears-for-marijuana-legalization-in-new-york.
Speights, Keith. “Why Canopy Growth, Hexo, Tilray, and other pot inventories soared today.” The Motley Fool, March 15, 2021, www.fool.com/investing/2021/03/15/why-canopy-growth-hexo-tilray-and-other-pot-stocks/?fbclid=IwAR0dauSH-0lnKMlRHVgkCbF9aaaDWjJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJgrowth-hexo-tilray-and-other-growth-hexo-tilray-and-other-growth-hexo-
Microsmallcap.com. “US legalization talks offer cannabis companies growth opportunities.” Www.prnewswire.com, March 11, 2021, www.prnewswire.com/news-releases/talks-of-legalization-in-the-us-present-growth-opportunities-for-cannabis-companies-301245414.html.
Reuters. “BAT is buying £ 126 million in Canadian cannabis company OrganiGram.” The Guardian, March 11, 2021, www.theguardian.com/business/2021/mar/11/bat-buys-pounds-126m-stake-canadian-cannabis-firm-organigram-tobacco.
Holland, Frank. “Canada’s Aurora Cannabis Is Up After A CBD Deal Is Made To Enter The Lucrative US Market.” CNBC, CNBC, May 20, 2020, www.cnbc.com/amp/2020/05/20/canadas-aurora-cannabis-makes-a-cbd-deal-to-enter-us-market.html.