In new developments, marijuana stocks are continuing to charge higher, fueled by the announcement that Aurora Cannabis Inc., a major medical marijuana producer, and distributor, announced its upcoming acquisition of South-America focused ICC Labs Inc., a licensed cannabis producer, and vendor in Uruguay.
Announced just this Monday, both companies have entered into a definitive arrangement agreement that states Aurora will be acquiring all of ICC’s shares for a price of $1.95 per share, which all in all, will give a total of approximately $290 million. Approved by the Board of Directors of each of the companies involved, the new acquisition will help establish Aurora as an industry leader this side of South America.
Presently, ICC has over 70 percent of the overall market in Uruguay, and as the first country to legalize adult consumer use of cannabis in a continent that has over 420 million people, it won’t be surprising if Aurora experiences a sudden tremendous growth in its business.
According to Aurora CEO Terry Booth, “ICC is an ideal partner for Aurora to establish leadership in the South American cannabis market, delivering clear first mover advantage on a continent with over 420 million people. ICC and its management team have shown exceptional vision and execution across production, expansion, distribution and product development. The company has a very strong management team with deep connections throughout the continent, which we believe will facilitate successful expansion into all South American markets.”
As per Bloomberg, the latest acquisition is only a continuation of Aurora’s acquisition spree, which saw Aurora shares gain over 4.1 percent, while ICC gained as much as 5.6 percent.
In a phone interview by Bloomberg, Aurora’s chief corporate officer Cam Battley stated, “We feel a significant sense of urgency to rapidly establish a powerful global footprint. We see ICC as the jewel of the South American market. This is going to be our anchor in South America and we have very big plans for the continent.”
This resulted in weed stocks experiencing huge gains throughout the year. As a matter of fact, Bloomberg also reported that since mid-August, the Cannabis stock index has gained over 35 percent.
Although still a relatively young industry, the legal marijuana has observed immense growth, skyrocketing itself to the top in the more recent years. (Source)
For other cannabis companies in the industry, this means nothing but fantastic news. The steady gains of cannabis stocks can only point to one thing: Growth, which is something a young market like the cannabis industry can definitely benefit from.
Add the fact that as an increasing number of states are legalizing either medical or recreational marijuana in some form or another, and it becomes more apparent that growth in this industry is inevitable, and everyone is eventually going to take their own slice of the green cake.
One such example of a company is PotNetwork Holdings, Inc. (OTCMKTS:POTN), which, despite being relatively young in the business, has already been making consistent waves in the industry that are bigger than the last.
Based in Colorado where most marijuana and hemp farms are situated, POTN operates as both a publicly traded company that aims for shareholder growth and a holding company for its many subsidiaries, the company has seen more than its fair share of time in the spotlight in the more recent years.
For one thing, its subsidiary and distribution arm, Diamond CBD, is currently the top manufacturer of CBD products throughout the United States. Through Diamond CBD’s nationwide reach and immense consumer market, POTN is able to distribute its more than 15 recognizable brands all throughout the 50 states of the U.S., contributing to its massive yearly revenue.
As a matter of fact, to date, the company has over $12 million in revenue for the first half of 2018, while Diamond CBD saw its monthly revenue more than double itself up, what with its products seeing a strong start both locally and internationally.
A true leader in the cannabis industry, the company recently filed a Form 10 to become a fully reporting Securities and Exchange Commission company, which is in line with its goal of being more transparent with its operations. Furthermore, what with its focus on riding Diamond CBD’s wave, the company is also moving forward with changing its name to Biotech Hemp, Inc.
The rising prices of cannabis stocks due to Aurora’s new acquisition is great news for smaller companies like POTN. For a company that has exhibited the ability to rise up in a young industry, the growth of its sector is great. Add the fact that according to Business Insider, millennials, a demographic that has avoided investing for the longest time, are starting to take an interest in marijuana stocks, and you got yourself the perfect formula for success.
POTN may be young in the grander industry, but its history of success has all the makings of a leader in a market sector that can go nowhere but up.