The Canadian cannabis king will buy one of the largest multi-state cannabis operators in the U.S. This is huge news for the industry, and it will mean incredible gains for anyone who knows how to play this situation…

You’ve doubtless seen the headlines – Canopy Growth (NYSE: CGC) is going to buy Acreage Holdings (CSE: ACRG, OTC: ACRGF).

The significance of this deal cannot be understated: The largest Canadian cannabis company is uniting with one of the largest U.S. multi-state cannabis operators.

The deal can’t and won’t fully close until cannabis is fully legal on a federal level in the United States. But basically, Canopy will pay Acreage shareholders some cash now and will issue Canopy shares for Acreage shares when the deal closes.

This deal is great for the cannabis industry.

At the Institute, we’ve long been talking about the wave of mergers among the industry’s biggest players as companies position themselves for the global growth of legal cannabis. In fact, we wrote about it just this week. We’ve also written that Canopy wouldn’t sit on the $4 billion war chest it gained from its deal with Constellation Brands (NYSE: STZ) for long.

And of course this deal is also good for cannabis investors – very good.

Let me explain just what this news means for your bottom line…

An All-Out Frenzy

This deal is the global equivalent of the Cresco Labs Inc. (CSE: CL, OTC: CRLBF)Origin House (CSE: OH, OTC: ORHOF) merger and turns the industry’s merger mania into an all-out frenzy. Every large cannabis company in the world is now under pressure to grow larger or risk being beaten by the Canopy-Acreage combo in market after market.

Look for the pace of deals to increase.

Canopy will probably buy (or agree to buy when the time is right) more U.S. assets, since Acreage has an enormous license footprint but lacks a critical mass of dispensaries in most of those states.

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The move also places more urgency on other large multi-state operators. These companies were already compelled by the Cresco-Origin House merger to build critical mass now rather than waiting for more licenses to become available in various states.

What’s more, the deal creates an interesting problem for other Canada-U.S. deals. The other large licensed Canadian producers will now feel pressure to gain access to the U.S. markets as they try to keep up with Canopy’s global reach.

But as we’ve discussed, only Canopy has $4 billion of cash to spend on this kind of deal. Now, Cronos (Nasdaq: CRON) has nearly $2 billion – but this acquisition instantly makes Canopy a Canadian kingmaker. No one else is even close. How does Aurora (NYSE: ACB) or Aphria (NYSE: APHA) keep up with this pace of investment?

The most likely answer is more large-company investments in the big Canadian producers. We know that other companies have been interested in investments of the sort Constellation and Altria (NYSE: MO) have made in Canopy and Cronos. Companies like Aurora, Aphria, and Tilray Inc. (NASDAQ: TLRY) will need to agree to deals with those outside investors if they want to keep up with Canopy.

Smaller producers like Hexo Corp. (NYSEMKT: HEXO), OrganiGram Holdings (TSXV: OGI, OTC: OGRMF), and The Green Organic Dutchman (TSX: TGOD, OTC: TGODF) will need to merge with each other and take outside investors if they want to become important players. Alternatively, those companies can pick a niche and seek to dominate it, as The Green Organic Dutchman and OrganiGram aim to do with organic cannabis.

A Bullish Outlook on U.S. Legalization

Another interesting aspect of this deal is its timing. It came more quickly than I thought it would, and that’s bullish for the pace of legalization in the United States.

Canopy would not have agreed to acquire Acreage in the future if it felt that future was several years away. Similarly, Acreage would not have agreed to sell if it thought that future was very far off. Such a deal would entail too much risk for Canopy and give away too much opportunity for Acreage.

Acreage Board Member and American Cannabis Summit Spokesperson John Boehner, former Speaker of the U.S. House of Representatives, has recently agreed to lead an industry lobbying group to gain that federal legalization. It could be that he’s hearing good things back from his extensive contact list.

And of course federal legalization would be even better news for cannabis investors, ushering in an even bigger wave of mergers.

For anyone thinking of investing, the big message is get in now and hold on tight! There’s going to be a lot of activity in the cannabis industry over the next few months, and investors with the right positioning stand to make a lot of money and end up with shares of companies destined to dominate the coming $100 billion industry.

Greg Miller
Executive Director, National Institute for Cannabis Investors

P.S. If you think the market is crazy now, just wait. Folks who aren’t paying attention could lose everything. But it doesn’t have to happen to you. You could still get “unbelievably wealthy” over the next six to eight months. How? Just following in the footsteps of the most powerful and connected men in America. And if you click here, we’ll show you exactly how to do it.


Comments

21 responses to “This Merger Is a Watershed Moment for Cannabis”

  1. I’m buying a position in every company you recommend in nicinvestor portfolio
    Lead the way Greg I’m with you

  2. OK Greg sounds great but your title is where I think you come in for me — You are the guy I’m depending on to be the guy that KNOWS HOW TO PLAY THIS SITUATION – so what’s your recommendation

  3. Hello Greg my Professor how are you? I see you are still doing what you do best, Educate and Elevate our knowledge of this industry and I greatly appreciate you for that. I hope you and your family as well the NICI staff and NICI family. Have a great and safe Easter Holiday!!! Much success to all of us in the future!!!!

  4. Hi Greg. I became a member of NICI Investor’s club and i am convinced you are the man. I have never invested before, but I believe you not only have the experience and knowledge, you are teaching us so that we can continue on. For that i can appreciate and thank you. I’m ready, let’s go.

  5. Have heard that GTI is preparing to strike next and that Charlottes Web, Ellixinol, Trulieve, and CV Sciences in earnest negotiations with top US MSO’s to be acquired by these big MSO’s. Awesome news for the cannabis industry with Canopy/Acreage and hopefully this will be the catalyst to trigger major acquisitions and form our cannabis industry more expeditiously.

    • That’s pretty much when a supply chain of a company is owned by that same company. I’m guessing it would be like a “seed to sale” type thing. In other words they don’t out source. Like Apple sells IPhones. They don’t buy the chips from another company. They make them themselves! Hope that helps!

  6. I own shares of both Canopy & Acreage. Canopy has done fine for me but Acreage hasn’t done much since I bought It. Being that I own both, what’s the best play? Keep Canopy, sell Acreage when the merger takes place? Or vice-versa? Or keep both and let the merger play out? Max out my CGC shares. Thanks.

    • I have been in both of these companies and canopy is a international company not just a one product company but has many divisions in growth-medical-pot-cbd oil so on so stay with cgc and hold on the company they are buying for their reach is international not just north America population base here is three-hundred-sixty-five million while the base population in Europe is six-hundred seventy-five million
      stay on track and you should be happy with your investment
      in the near future

    • I just joined don’t have a whole Lotta money to invest what is the best thing I should invest in and how do I go about investing in a company that would show me back double my amount of mon says:

      I just joined don’t have a whole Lotta money to invest what is the best thing I should invest in and how do I go about investing in a company that would show me back double my amount of money that I invested

  7. Hi there Greg. Really appreciate all you do. I don’t hold any Acreage, but I do have Canopy. I was thinking of selling some of it, but I’m now thinking that I’d better hang on to all of it. Is that the best thing to do?
    Thank you for all the help.

  8. I am new at bidding on any thing and do not know where to bid could anyone show me where to bid (PLEASE)

  9. Greg I am trying to keep up with all of your recommendations and just hope I have enough money to continue. Bill Rogers

  10. Roosevelt open a brokerage account with Charles Schwab at Schwab.com or Fidelity .com and put some money into the account and you can begin buying the Cannabis stocks within several days after opening the account. you don”t need to put a lot of money into the account , but put in as much as you can, so you can purchase shares of several companies.The brokers have many people who will help with the opening of your account and they will also teach you how to put on the trades .I have accounts with both of them and can tell you they are both great to work with. Schwab is easier to use to buy cannabis than fidelity, so I buy all my cannabis with Schwab .hope this helps you.

  11. Hi Greg,
    I love your advice in stocks and the dossiers that are included with each one. I also like that you inform us when to purchase, how much to purchase, and when to sell and how much to sell. I have been with you since Feb 2019 and can’t say enough about your professionalisms. At this time I have 18 stocks most are pot stocks and all are doing very well. I’m in this for the long haul because the best things in life are worth waiting for. Thank you and keep up the great work. Ken S.

  12. Right now, I own 15 stocks, all from the Vault #5’s. I am wondering whether to buy more Canopy Growth and not spread myself so thin. Do you have any advice on that?

  13. There has been a lot of hype by pundits about a “pot” stock that is big in CA, FL, MA, NV and 1 other state. I know that I have a position in it from the recommendations from NICI and want to buy some for my children but can’t for the life of me remember which one it is. Any help out there?

  14. Just wondering about the post by “Cher” I know there are many top athletes and Hollywood celebs investing in cannabis. Are you the Cher we all know? If so….you are an amazing talent and I have enjoyed listening to your music! If not…I wish you luck…heck I wish us ALL luck

  15. Just wondering what a conservative amount would be to get started with Schwab for buying stocks…$100? 1,000? More? I am so interested and appreciate your knowledge so much!

  16. Everyone is “high” on the Cresco Lab/ Merger with Origin house….every one except the market… why did this huge deal not come with a stock frenzy and millions of shares trading?

  17. Gregg
    Is there a chance we could get a IPO calendar showing the pot stocks and the vetting with scores ?

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