Replies to post #7059 on OrganiGram Holdings Inc (OGI)

[john1311]

Financial Times today - 2

Jesse Pytlak, equity analyst at Cormark Securities, said the Constellation investment was the main trigger for the recent share price rally, demonstrating a “serious commitment” to the marijuana sector by a Fortune 500 company. Over the past 12 months, shares in Cronos Group have risen more than 400 per cent, with Aurora up 210 per cent and Aphria up 190 per cent. The Constellation deal is not the only driver. Earlier in the summer, Aurora Cannabis bought rival medical marijuana group MedReleaf in a $2.5bn deal, having already snapped up CanniMed Therapeutics five months previously and invested in the public listing of The Green Organic Dutchman. Another key factor for the industry is the opening up of the US market. About half of US states allow cannabis to be used for medicinal purposes, while nine places, including California, Colorado, Massachusetts and Washington DC, allow people to use it recreationally.

In July, Canadian producer Tilray became the first cannabis producer to carry out an initial public offering in New York, closing 32 per cent up from its listing price. “The legalisation in Canada is clearly one factor driving investment, but it’s more about the US market,” said Mr Faes.

Mr Pytlak said investors were now beginning to better understand the regulatory environment in the US, where companies are currently not allowed to transport the drug across state lines. Nevertheless, food and drink analysts envisage a rapidly maturing market that could see various strains of the plant laced through consumer goods ranging from soap to coffee and sports drinks. Linda Gilbert, managing director of consumer insights for BDS Analytics, said there were many opportunities for the use of cannabis as a new ingredient in existing food and drinks. “If we look at the cannabis plant, or hemp or marijuana, there are hundreds of different cannabinoids that could become new flavours or aromas for a beverage,” she said. “The bottom line is that cannabis is not new, people have been consuming cannabis for centuries. What’s new is legal cannabis,” said Ms Gilbert. “It’s very rare for an entirely new category of product to become an investment opportunity.”