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The Canadian medical marijuana industry has been one of the hottest places to invest and the sector is barely in the first inning of a multi-decade growth cycle.

The opening of new international markets and the maturing of existing international markets has made the medical marijuana opportunity a multi-billion-dollar opportunity and we are bullish on the companies levered to this growth.

Today, we have highlighted 3 of the biggest stories of the Canadian marijuana industry and investors need to closely watching these opportunities and developments. 

TGOD: The Next Big Canadian IPO

Last week, investors learned that The Green Organic Dutchman Holdings Ltd. has filed a preliminary prospectus related to a proposed initial public offering (IPO) on the Toronto Stock Exchange (TSX).

Since late 2016, TGOD has been grabbing headlines and has been nothing short of an execution story. The company is a licensed medical cannabis producer in Canada uniquely positioned within the burgeoning medical and recreational cannabis industry. TGOD produces farm grown pharmaceutical grade organic cannabis without the use of synthetic pesticides through all-natural craft growing techniques and organic principles.

The company is focused on building a well-balanced and multi-disciplinary team that can leverage the experience, purchasing power and sector specific expertise of two multi-billion dollar companies as strategic partners. These partnerships have de-risked the project and provide shareholders with above average rates of returns based on a platform of long-term growth, stability and profitability.

TGOD has differentiated itself from the competition by offering craft style premium organic cannabis. This style of cannabis is better for the consumer as well as the company since it sells for a higher price with increased margins. The company is led by a management team that has a proven track record of success with licensed Canadian medical cannabis producers such as OrganiGram (OGI.V) (OGRMF) and Emblem Corp (EMC.V) (EMMBF).

Last month, TGOD completed a $112 million private placement that included a $55 million investment from leading licensed medical marijuana producer Aurora Cannabis (ACB.TO) (ACBFF). The companies also entered a supply agreement which validates TGOD’s strategy to produce premium high quality organic cannabis.

To date, TGOD has raised a total of $160 million, fully funding the expansion of 970,000 sq. ft. state-of-the-art, ultra-high technology hybrid greenhouse facilities in Ancaster, Ontario and Valleyfield, Quebec (116,000 kilograms of funded production capacity). TGOD’s expansion and strategic partnership with Aurora positions the company as an industry leader and sets the foundation for the highly anticipated upcoming 2018 IPO.

We are bullish on TGOD and are closely monitoring the company, eagerly waiting for the company’s IPO. With 116,000 kilograms of funded production expansion projects, the company is poised to be one of the biggest marijuana producers in the world.

We expect the company to see rapid growth on account of its best-in-class organic products, its strategic partners, and its dedication to the production of premium quality cannabis. With over 4,000 shareholders as a private company, there is clearly something very special about TGOD and this is a company you need to watch. 

Aphria-Nuuvera: An Undervalued Opportunity

One of the stories we have been watching is the pending acquisition of Nuuvera (NUU.V) by Aphria (APH.TO) (APHQF). While we are favorable on the potential of the combined company, the market responded negatively to this development.

Last week, Aphria and Nuuvera announced an amended agreement where the companies agreed to reduce both the required level of unrestricted cash and the consideration payable to holders of Nuuvera's common shares.

Aphria will benefit from Nuuvera's management team and the international expansion opportunities it has secured. The company plans to leverage Nuuvera's relationships in Germany, Italy, Spain, the United Kingdom, Malta, Israel, Lesotho and Uruguay to establish a leading international footprint and expand global processing and manufacturing capabilities.

The acquisition of Nuuvera bolsters Aphria's recent accretive and value-add transactions, including Broken Coast Cannabis. Through Nuuvera the combined company has access to the only standalone Health Canada GMP-approved facility that is authorized and dedicated under its controlled drugs and substances license to conduct commercial scale activities with respect to cannabis and cannabinoids.

During the last month, the companies have been under significant pressure and during this time, Nuuvera and Aphria have fallen more than 27%. Momentum has been trending lower and is approaching oversold levels. We are bullish on the combined company and investors need to keep an eye on this opportunity.

Aurora-CanniMed: A Global Cannabis Leader in the Making

One of the biggest stories of 2018 was Aurora Cannabis’ (ACB.TO) (ACBFF) acquisition of CanniMed Therapeutics (CMED.TO (CMMDF). Unlike Aphria’s acquisition of Nuuvera, this acquisition was initially the furthest thing from friendly. In late January, CanniMed agreed to acquisition terms that valued the Canadian medical marijuana producer north of $1 billion. 

We are bullish on the combined company and see tremendous opportunity for synergies. Both companies are laser focused on two of the most significant trends in the cannabis industry, international markets and cannabis oils.

The trend toward smokeless marijuana products continues to increase and CanniMed was one of the first companies to receive a license to sell cannabis oils from Health Canada and produces cannabis in a GMP compliant facility.

The international opportunity is massive and Aurora was one of the first companies to capitalize on this. Through Pedanios, Aurora is a leading medical marijuana producer in Germany and is also levered to the emerging medical marijuana markets in Australia, Denmark, and Italy.

One of the reasons why we are bullish on the combined company is due to the support that Aurora would provide CanniMed. Aurora has a war chest of a cash, strategic relationships and assets, and significant infrastructure in Canada and abroad.

Aurora has made strategic investments in Hempco Food and Fiber Inc. (HEMP.V) and Radient Technologies (RTI.V), which would significantly benefit the combined company.  We are favorable on these relationships and the benefit they would have on CanniMed’s cannabis oil business.

The combined company will be a global leader and we are very bullish on the long-term business. The combined company has the capital and resources to execute on the global medical marijuana market and this is a story investors need to watch.