Marijuana Legalization in Canada Could Lift These 3 Stocks Very High

On October 17, Canada will become just the second nation in the world to fully legalize the cultivation, sale, and possession of marijuana, joining (nope, it’s not The Netherlands) Uruguay. One of Liberal Prime Minister Justin Trudeau’s campaign promises, legalization was originally scheduled for July 1. That date was eventually pushed back due to various provinces being unprepared to implement their legal marijuana frameworks, which will vary by province.

Canadian bank CIBC anticipates the legal marijuana industry in Canada could be worth $6.5 billion within a couple of years, only slightly less than the $9 billion that the U.S industry was projected to have taken in last year. With such a vast, untapped market ready to be exploited, several companies have been scrambling to set up their marijuana growing and distribution networks ahead of legalization. We’ll take a look at the three leaders in that regard in this article.

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Canopy Growth Corp (NYSE:CGC)

Canopy Growth Corp (NYSE:CGC), which has the coveted WEED stock ticker on the Toronto Stock Exchange, looks like the early leader in the Canadian recreational market, with anticipated growing space of up to 5 million square feet by next year. That could allow it to produce as much as 780,000 kilograms of marijuana annually, an amount that could probably last Snoop Dogg at least six months. It’s also building a strong distribution network, having supply agreements with three of Canada’s ten provinces in addition to having plans to open its own retail outlets in two provinces.

Canopy Growth Corp (NYSE:CGC) also has burgeoning opportunities outside of the Canadian market, with subsidiaries set up in several South American, European, and even African countries where medical marijuana markets exist or could exist in the future. Furthermore, the company could be a pioneer in marijuana-infused beverages, as it’s working with Constellation Brands, Inc. (NYSE:STZ), which has a 9.9% stake in the company, on such products.

On the next page we’ll look at two other stocks that are set to hit the ground running once weed is legalized in Canada later this year.

Aurora Cannabis Inc (OTCMKTS:ACBFF)

Aurora Cannabis Inc (OTCMKTS:ACBFF) has made numerous acquisitions and deals in recent months as it rapidly expands its marijuana growing capacity, which is now estimated at close to 600,000 kilograms annually. Aurora has snatched up no less than eight companies over the past year, including CanniMed Therapeutics and MedReleaf. It has a distribution deal in place with leading Canadian pharmacy chain Shoppers Drug Mart, and Aurora Chief Corporate Officer Cam Battley believes the company now has an “insurmountable lead” in the Canadian marijuana market.

As with Canopy Growth Corp (NYSE:CGC), Aurora could also get into marijuana-infused beverages, with Molson Coors Brewing Co (NYSE:TAP) reportedly being in discussions with several Canadian marijuana growers on such a collaboration, including Aurora. Aurora Cannabis Inc (OTCMKTS:ACBFF) is likewise eyeing global expansion opportunities, including in the U.S, and Battley believes that both Aurora and Canopy are poised for success internationally thanks to the Canadian market giving them an important first-mover advantage.

Cronos Group Inc (NASDAQ:CRON)

Cronos Group Inc (NASDAQ:CRON) debuted on the NASDAQ earlier this year and represents another Canadian cannabis company that is rapidly expanding globally, having signed distribution deals in Poland and Germany, and inking joint ventures with companies in Australia, Israel and the United States. Its Israel operations are expected to be capable of achieving 100,000 kilograms of production annually, while Cronos’ overall production is expected to jump by 600% by early next year.

In Australia, Cronos Group Inc (NASDAQ:CRON) is planning to break ground on a 20,000 square foot facility that will initially produce 2,000 kilograms annually. While being focused initially on the Australian and New Zealand medical marijuana markets, Cronos also views its Australian joint venture as providing a valuable call option on the Asian market. Cronos’ sales skyrocketed by 636% last year to $4.1 million, while net income more than doubled to $2.5 million.

Disclosure: None