Cannabis Stock Making Gains; One Big Deal Causes A Knock-On Effect

Cannabis Stock making gains

There has been some cannabis stock making gains in the past week and certain occurrences are to thank for it.

The first significant move was Constellation Brands’ (NYSE:STZ) massive $4 Billion investment boost into its new cannabis supplier Canopy Growth Corp (TSX:WEED). Not only did this investment cause a surge in share price for the Canadian marijuana cultivator—a 30% surge to be more precise—it had a knock-on effect across the market.  

Cannabis Stock making gains
Source: Google Finance

Since Constellation’s announcement, Cronos Group (TSX:CRON) stock has soared more than 40% in the past week alone and rival Tilray (NASDAQ:TLRY), who just went public on the NASDAQ last month, also saw a 60% increase in the last five days.

Cannabis Stock making gains
Source: Google Finance
Cannabis Stock making gains
Source: Google Finance

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Cannabis Stock Making Gains: Infused Drinks

The buzz created is showcasing the power of the cannabis-infused drinks market. The market that has yet to kick-off, yet predictions for its potential are clearly positive. In recent months, there has been noticeable partnerships happening whereby major drinks companies have been cozying-up to cannabis suppliers, eager to take their slice of what will no doubt be a massive market; a proverbial ‘game-changer’ for recreational marijuana.

Molson Coors (NYSE:TAP) has also recently signed a deal with The Hydropothecary Corporation (TSX:HEXO) for example.

Ontario Province

But another announcement has boosted stock price too; Ontario announced supply agreements this week with 26 licensed producers.

Tilray and Cronos both fall under these agreements, with Tilray supplying marijuana for the Ontario Cannabis Retail Corporation, and selling products under the Marley Natural, Irisa, and CANACA brands.

>> Wells Fargo Closes Political Campaign Account For Medical Marijuana Affiliation

Cronos now adds a fourth province to its list. It already has supply deals with provinces British Columbia, Nova Scotia, and Prince Edward Island.

Conclusion

Even though the US most likely won’t be taking part in the sale of cannabis-infused drinks as cannabis continues to be prohibited by the federal government, it seems, for now, Canada is considered to be a big enough market; recreational marijuana becomes legal there on October 17th.

And the hope is that the success of such business and the growth it brings may just encourage Canada’s neighbor to lessen its stance toward the drug in the not too distant future.

Imagine the stock growth if that happens.

Featured Image: Deposit Photos/Olivier26

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