| SPONSOR: Bougainville Ventures Inc (CSE: BOG) Converting irrigated farmland to greenhouse-equipped farmland. Bougainville does not “touch the plant†and only provides agricultural infrastructure as a landlord for licensed marijuana growers. |
While marijuana stocks have pulled back with the chaos of the broader
markets in late 2018, we cannot forget about the countless catalysts
that are still out there.
One of the major catalysts involves mergers and acquisitions.
Alcohol companies have had significant interest, for example.
Months ago, Constellation Brands increased its stake in Canopy Growth (CGC) by $4 billion.
That came just months after Constellation first took a 10% stake in
Canopy to help create nonalcoholic cannabis-infused drinks and other
products.
All, as sales of beer fall in the United States,
brewers have begun to bet that legalization of marijuana around the
globe, especially the United States, will continue to build momentum and
sales of cannabis products will take off.
Molson Coors even
listed legal cannabis among the biggest possible risks to its business
in its annual shareholder report. Even Coca-Cola expressed some interest
at one point.
Now, cigarette makers are jumping into the fray, too.
For example, shares of Cronos (CRON) rocketed higher last
week on news that Altria Inc. took at 45% stake in the company for $1.8
billion.
“Investing in Cronos Group as our exclusive partner in
the emerging global cannabis category represents an exciting new growth
opportunity for Altria,” said Howard Willard, Altria’s CEO, as quoted by
CNN.
Talks started, as the tobacco industry comes under
pressure, as sales have begun to sharply decline. Just last year,
cigarette smoking fell to its lowest point in history. Marijuana sales
may bring back some of that lost revenue, though.
According to
CNBC, “Counting both legal and black-market sales, the total demand for
pot is approximately $52.5 billion, Marijuana Business Daily has
reported.â€
This could potentially lead to other major M&A
deals in the industry following Altria and Constellation news. If
nothing else, such major deals provide further evidence that the
opportunities in the global marijuana industry are much more than just
hype.
For Altria to invest $1.8 billion in a company isn’t small change.
We wouldn’t be shocked to see other pot stocks see further M&A interest moving forward.
Stay tuned for more on potential deals right here.
Source: https://www.chasingmarkets.com/news/15c0e6fba8d6e7/Marijuana_M%26A%3A_Altria_Group_Opens_the_Door_to_Major_Deals