A legalization bill could be ready to be voted as early as next week by the state senate. Specifics such as the number of plants that can be grown in private homes and how to determine impaired driving for someone who has used marijuana are still being discussed. (1)
How did cannabis legalization in New York affect Canadian cannabis stocks?
Many Canadian pot stocks jumped up this Monday as cannabis legalization agreement in New York moved ahead.
Tilray was the biggest mover, with shares jumping 12% as of 12:24 p.m. PST. Aurora Cannabis shares were up 5.1%. Canopy Growth and Hexo weren’t too far behind, with the stocks rising 4.1% and 4.5%, respectively after the news of cannabis legalization in New York. (2)
But Canadian cannabis producers can enter the US market only when the federal government legalizes and decriminalizes cannabis use. This can potentially happen in the near future as more and more U.S. states are legalizing recreational cannabis. (3)
Canadian producers prep to enter the US market
Through a recent press release dated March 11th, Organicgram Holdings Inc. (OGI) announced its $221 million strategic development plan and its interest in expanding into the US, right when a subsidiary of British American Tobacco (BAT) buys nearly 20 percent of its stake amounting to $126 million. (4)
The investment shows BAT’s interest in venturing into cannabis beyond its current tobacco business, promising an entry to OGI into the US market in the coming days. The companies also signed a Product Development Collaboration Agreement (the “PDC Agreement”).
The move could accelerate its R&D program and product development activities and bolster its ability to enter the U.S. and other international markets. OGI’s stocks have been moving in an upward trajectory over the past few weeks even though the growth has been through a rocky road.
A similar announcement was made by Fire & Flower Holdings Corp in February 2021 as it entered into strategic agreements with a Canadian private company, operating as “American Acres Managers”. The deal included an agreement to license its Fire & Flower brand, store operating system, and Hifyre™ technology platform for dispensaries in California, Arizona, and Nevada. (3)
The agreement allows Fire & Flower to have the option to acquire American Acres at a discount to fair market value. The acquisition can occur upon the federal legalization of adult-use cannabis in the U.S. (3)
Finally, all hopes lie on the federal legalization of cannabis in the U.S. For the State of New York, the news is promising. “I’m optimistic it will be resolved sooner than later”, @ZackFinkNews from @NY1 News tweeted on March 16th, 2021.