After years of publicly railing against the public use of cannabis, Canada’s largest pharmaceutical companies are increasingly turning their attention to the cannabis industry. It appears that, despite the country’s current stance on the substance, the country’s largest pharmaceutical companies are looking to take advantage of the growing demand for cannabis.
Altria Group (NYSE: MO) is a company that has been in the US tobacco market for a very long time. As the largest tobacco company in the world, it has been involved in the tobacco industry for over 100 years. The company is also the owner of Philip Morris International which recently acquired the Israeli company EZ-GO. It is expected that Altria will start supplying cannabis to the US market in the near future, which would be a major development in the US cannabis market.
When a stock goes up 47% in one day, it’s time to pay attention. GW Pharmaceutical (NASDAQ: GWPH), one of the world’s largest cannabis biotech companies, did just that on March 3. February was marked by the announcement that GW had been acquired by a leading pharmaceutical company, Jazz Pharmaceutical (NASDAQ: JAZZ). With this news, GW shares rose 47% in one day to a new high. GW Pharmaceutical (NASDAQ: GWPH) 12-Month Chart 
The agreement with GW is part of a growing trend. Mergers and acquisitions (M&A) in the cannabis sector are on the rise.
- The 16th. December 2020, two of Canada’s largest cannabis companies, Tilray (NASDAQ: TLRY) and Aphria (NYSE: APHA), announced a $4 billion merger, creating one of the largest cannabis companies in the world. Tilray’s shares jumped nearly 50% on the news.
- The 22nd. December 2020 US multi-state operator AYR Strategies (OTC: AYRWF) announced an agreement to acquire Liberty Health Sciences (OTC: LHSIF) for $290m. Liberty Health shares rose 60% on the news.
Looking ahead, I see a strong possibility that 2021 will be a banner year for cannabis M&A. I think we are going to see some mega deals in the next six months. Investors are now asking themselves an important question. Which cannabis stocks will be next to jump on the buying wave? One of the cannabis stocks seems to be the perfect buying target. This company is :
- is already active in six states
- Market leader in high-growth Arizona
- with impressive sales growth
- Undervalued compared to competitors
Harvest Health and Recreation (CSE: HARV, OTC: HRVSF)
Harvest, headquartered in Tempe, Arizona, is one of the largest cannabis companies in the United States, with a market capitalization of $1 billion and operations in six states. The company has 36 retail locations, 12 processing and cultivation locations, 15 retail locations in AZ, 8 medical pharmacies in PA and 6 medical pharmacies in FL. This early leadership in Arizona’s medical cannabis market is expected to be a powerful catalyst for growth. Arizona voted to legalize recreational cannabis in November 2020, and the state is expected to become one of the largest cannabis markets in the United States. Harvest has the opportunity to benefit from this growth, as companies with medical licenses are typically the first to be authorized to sell recreational cannabis. This puts Harvest in an ideal position to benefit from the legalization of recreational cannabis in Arizona.
3 reasons why Harvest is a good buyTarget
#1 – The crop has the right size to release
With a market value of $1 billion, Harvest is technically one of the largest cannabis companies in the United States. However, it is significantly smaller than industry giants such as Curaleaf (OTC: CURLF), which has a market value of $9.5 billion, and Green Thumb Industries (OTC: GTBIF), which has a market value of $6.2 billion. Harvest’s low market value compared to the largest companies in the sector makes it a potential takeover target.
#2 – Harvest provides quick and easy access to new markets
The purchase of Harvest allows the larger competitor to quickly and easily enter some of the fastest growing cannabis markets in the US, including Arizona, Pennsylvania and Florida.
#3 – Harvest for sale
Over the past six months, Harvest shares have risen significantly thanks to impressive revenue growth and an uptick in the broader cannabis sector. But despite this sharp rise, the stock is still 70% below its all-time high in March 2019. That means Harvest is for sale and trading at a steep discount to its highest price in two years. Harvest biennial health and recreation plan (CSE: HARV, OTC: HRVSF) 
Members ofCannabis Stock Trades are betting on Harvest’s sharp rise. 
The second one. In September, we alerted them that we would be adding Harvest stock to our cannabis stock portfolio. Since adding this position, Harvest shares are up 158%. If you want to know when we add or remove cannabis stocks from our portfolio, sign up for a free two-week trial.
Overview of performance and potential for return
Merger and acquisition activity in the cannabis sector is increasing. Harvest seems like the perfect target for redemption. The company is smaller than the largest U.S. cannabis companies, an acquisition would be a quick and easy way for a larger competitor to enter new markets, and the stock is on a tear, trading 70% below the all-time high it reached in March 2019. All factors considered, 2021 should be a great year for Harvest, with strong tailwinds for the stock. *Author Michael Vodicka owns shares in Harvest Health and Recreation (HRVSF). Best,Michael Water Editor, Cannabis Effects Trading
About the author and cannabis stock trading
Michael Wodicka is an equity analyst with over 20 years of trading and investment experience. His research has received attention in some of the industry’s most respected publications. He has been investing and managing investors in the cannabis sector since 2013. 
Mr. Vodicka offers his experience and advice to Cannabis Stock Trades members. Sign up for Cannabis Stock Trades and receive exclusive analysis from Mr. Water, trade alerts and a sample portfolio.
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