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Canada’s marijuana market has been one of the hottest places to invest and this trend has shown no signs of slowing down.

Canadian licensed medical marijuana producers have been one of the biggest beneficiaries of the recent rally and capital continues to pour into this burgeoning market.

Canada’s legal marijuana market continues to expand rapidly as licensed producers are laser focused on increasing production capacity ahead of the opening of the recreational marijuana market in 2018. 

Although we have seen many marijuana producers increase production capacity through the construction of new facilities, some of the better capitalized producers are acquiring other producers to increase market share and production capacity.

We are favorable on this strategy and are not surprised by the recent developments. Over the next twelve months, we expect more acquisitions within the Canadian cannabis market as larger licensed marijuana producers acquire some of the more attractive smaller marijuana producers. 

After Aurora Cannabis (ACB.TO) (ACBFF) announced plans to make a competing bid to acquire Cannimed Therapeutics (CMED.TO) (CMMDF), we want to highlight three licensed marijuana producers that we believe are acquisition candidates.

Emblem Corp. (EMC.V) (EMMBF)

Emblem Corp. has had a rough 2017 after the company had a very successful IPO in December 2016. So far this year, shares of Emblem have fallen more than 57% and the company’s market capitalization is approx. $115 million.

Although Emblem has faced some execution issues, the company is a differentiated opportunity and would be a significant acquisition for a company focused on improving the cannabis oil side of their business. Emblem has taken a pharmaceutical approach to the medical marijuana industry and the company is in the middle of a major expansion project.