Aurora Cannabis Corp, Aphria Inc., and MedReleaf Corp Drag Cannabis Composite Index Lower

James West

The Midas Letter Canadian Cannabis Composite Index was off by 0.93 percent near end of day on Thursday, May 17, 2018, pulled down by Aurora Cannabis Inc (TSE:ACB) (OTCQB:ACBFF) (FRA:21P) Aphria Inc (TSE:APH) (OTCMKTS:APHQF) (FRA:10E), and MedReleaf Corp (TSE:LEAF) (OTCMKTS:MEDFF) (FRA:MEW)

Canopy Growth Corp (TSE:WEED) (OTCMKTS:TWMJF) (FRA:11L1) bucked the trend, rising 4.65 % at mid-day after a wave of consolidation of its minority holdings in the BC Tweed  joint venture and Canopy Health Innovations – moves evidently interpreted as positive developments by the market.

Aurora Cannabis has been on its own acquisition bender of late, topping the most expensive acquisition in Canadian Cannabis Index history of CanniMed in a transaction valued at $1.1 billion with the acquisition announced earlier this week of MedReleaf Corp in a transaction valued at $3.2 billion. Aurora has declined 12.8 percent since announcing the MedReleaf transaction on May 14th, when it touched a high of $8.28. The company is coming under criticism from some investors for overpaying for assets and a lack of focused strategy in its acquisition.

CEO Terry Booth made clear in a recent interview that they are focused on an “International” strategy.

Aphria has also been making a lot of hay recently in the press release department since its acquisition of Nuuvera. The reaction to Aphria’s string of acquisitions and announcements would appear to be slightly more well received than Aurora’s, but obviously not as welcome as Canopy’s.

Aphria said it had acquired a minority interest in a hospital today in Germany. The Schöneberg Hospital will provide a springboard for Aphria to educate German doctors on the various medical attributes of cannabis as it rolls out increased access to cannabis for medical purposes.

The company also said it was partnering with a Canadian distribution arm of Glazer’s Wine and Spirits, through which it says it will distribute its Cannabis products throughout Canada. The presumption here is that Aphria will penetrate liquor agencies across the country through its partnership with a distributor of alcohol brands nationwide.

James West

James West

Editor and Publisher

James West founded Midas Letter in 2008 and has since been covering the best of Canadian and US small cap companies. He covers global economics, monetary policy, geopolitical evolution, political corruption, commodities, cannabis and cryptocurrencies. As an active market participant, James is not a journalist and is invariably discussing markets...
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