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During the past trading week (February 18 to 22), more cannabis public firms announced deals to get a spot in the Ontario retail market.

An estimation from a Canadian banking institution shows two producers already have control of half the recreational Canadian market and the decision from a licensed producer (LP) also made headlines this week.

Here’s a closer look at what some of the biggest news was during last week’s trading period.


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Canopy Growth (NYSE:CGC,TSX:WEED) and Aurora Cannabis (NYSE:ACB,TSX:ACB) already hold nearly half of the Canadian adult-use cannabis market according to Canaccord Genuity (TSX:CF).

A report from Marijuana Business Daily indicated Canaccord analyst Matt Bottomley estimates these two producers sales volume represents nearly 50 percent of the Canadian market in the first three months of legalization.

“After including estimated contributions from Tilray and Aphria, we believe the top four (licensed producers) in the space could end up representing upwards of 70 [percent] of recreational volumes in the industry out of the gate,” Bottomley wrote in his report.

More LPs find ways to gain spots in Ontario retail market

This week another two public marijuana firms secured deals with winners of the Ontario cannabis retail lottery to set up shops in the province, set to open in April.

Canopy Growth and Fire & Flower Holdings (TSXV:FAF), which made its public debut on Tuesday (February 19), were revealed to have new partnerships with winners of the lottery and will set up branding on these new stores.

Fire & Flower confirmed its two deals will be for stores in Kingston and Ottawa. While applications from the Alcohol and Gaming Commission of Ontario (AGCO) showed a proposal for a Tweed store, a brand of Canopy, in London.

Additionally, a Nova Cannabis store proposal also appears in the AGCO system. Nova Cannabis is a retail brand from Alcanna (TSX:CLIQ), which has an investment from Aurora Cannabis.

Fire & Flower disclosed these deals provide licensing and consulting fees and includes an option for a future purchase of the interest from the applicants themselves for the finished retail locations once the lottery process ends this year.

Last week three marijuana firms unveiled similar deals with lottery winners to aid in the setup of cannabis stores.

Aphria drops partner in the US

On Tuesday (February 19) Aphria (NYSE:APHA,TSX:APHA) announced it would not pick up its purchase option for Liberty Health Sciences (CSE:LHS,OTCQX:LHSIF), a multi-state operator (MSO) based in Florida.

The Canadian LP was forced to divest its stake in Liberty due to a clash with security regulators on the legality of its presence in the US market through the investment. Aphria sold a promissory note allowing it to re-acquire its shares in the MSO.

Aphria’s independent board members moved ahead with the decision, securing the company a cash consideration of C$47.4 million of thanks to the early termination.

In a statement to the Investing News Network (INN) George Scorsis, CEO of Liberty, said his company has never been “more optimistic about its growth trajectory and the opportunities to create value for its shareholders moving forward.”

These MSO firms are attracting the attention from investors as the US cannabis market continues to expand with new operations.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.


Keep up with major deals and investment opportunities in marijuana

 

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The post Cannabis Weekly Round-Up: Two LPs Dominate Recreational Market appeared first on Investing News Network.





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