Canopy Growth Corp (TSX:WEED) and Aurora Cannabis Inc (TSX:ACB) could have some new competition very soon. MedMen Enterprises is expected to complete a reverse takeover of Ladera Ventures Corp., which will result in the cannabis stock being listed on the Canadian Securities Exchange (CSE).
The company would become the largest U.S-based cannabis stock in Canada, with a valuation of more than $1.6 billion. MedMen sells both recreational and medicinal pot in 12 stores spanning three states. What sets the company apart from others in the industry are its storefronts, as they resemble Apple Inc. (NASDAQ:AAPL) stores.
It’s in stark contrast to what consumers will likely experience in Canada, where there will be many restrictions on how pot is sold and distributed, especially with government agencies running many stores.
The big danger now is that for Canopy Growth and Aurora, we’re seeing more competition come from south of the border for investment dollars, and that could result in bearish activity for their respective stocs. The U.S. market has a lot of potential, especially if we see pot eventually get legalized at the federal level.
However, the one advantage Canopy Growth and other Canadian pot stocks have over U.S.-based companies is that they can list on the TSX, while ones that have operations in the U.S. won’t be able to, at least not until pot is completely legalized there. While the CSE will be able to help companies like MedMen attract investors, it’ll still be limited compared to what bigger exchanges like the TSX can offer.
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