In late July, Ontarians learned that the PC government would move to privatize cannabis retail ahead of the October 17 date for recreational legalization. The previous Liberal government had committed to handing over control of the industry to the public sector. The move was met with anger from the union bureaucracy.
The race for licensing across the province and in municipalities is on, and are barely two months to prepare for the roll out. Today we are going to look at two companies that could win big from this move.
Alcanna Inc. (TSX:CLIQ) is an Alberta-based alcohol beverage retailer. Aurora Cannabis Inc. (TSX:ACB), the largest producer in Canada, acquired a 19.9% stake in Alcanna earlier this year.
There are reports that indicate the company began probing Ontario after Doug Ford’s win, and it is more than likely that it will explore options to expand into Ontario. It is currently converting stores in western Canada that will carry Aurora cannabis products.
The Second Cup Ltd. (TSX:SCU) stock has spiked 13% week-over-week as of close on August 2. The coffee retailer announced that it would enter cannabis retail back in April. It boasts a significant footprint in Ontario and is a great bet to take advantage of this shift.
There will be a mad rush among established retailers to enter into the largest market in Canada. This process will likely move quickly so investors should closely monitor events leading up to legalization in the fall.
