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Why is the sundial, Aurora, cannabis, Chronos and other marijuana stocks soaring today?



What happened

Friday is a good day for cannabis investors. Here is how some popular pot stocks fared:

So what

A wave of deals have swept across the cannabis sector in recent months. Industry leader Tilray And Aphria completed a merger earlier this month.The sundial grower recently caught cannabis retailer Inner Spirit Holdings Canopy Growth, reaching a deal to acquire The Supreme Cannabis Company in April. And today investors wake up to the news that HEXO Entered into a deal to buy privately held cannabis producer Redecan for about $ 766 million.

The 100 dollar bill was cut into cannabis leaves.

Image source: Getty Images.

The industry is gathering fast, and investors seem to be betting that businesses that remain will have a better chance of generating sustainable profits.

Now how

Canopy, Cronos, and Sundial have a cash-heavy balance sheet, so they can choose to make more acquisitions in the coming months.Aurora and OrganiGram have less cash and are more likely to get courted by their larger partners. But investors of all these companies should expect ongoing deals to transform the cannabis industry in the coming years.

This article represents the opinion of the author, who may not agree with the recommended position. “Official” of Motley Fool’s Premium Advisory Service. We are motley! Questioning even one of our own investing thesis – helps us all think critically about investing and making decisions that help us become smarter, happier, and wealthier.




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