Canada is the first G-7 nation to legalize recreational marijuana after the upper house of parliament voted 52-29 in favor of a revised bill to legalize recreational marijuana. This is a major milestone and cannabis investors need to be monitor how the market responds to this vote.

Canada’s recreational marijuana market is expected to open in the next 8 to 12 weeks and this is a significant development that should drive the cannabis sector higher. Yesterday, Canadian cannabis stocks rallied off their lows and were a bright spot in a market that traded lower on average.

Over the last three years, investors have been investing in Canadian cannabis stocks and this has proved to be a very wise investment. Canada is a global leader in the legal marijuana market and is capitalizing on burgeoning global market.

Today, we have highlighted 5 companies that will benefit from the passing of the revised bill. Although there are countless companies that will benefit from this legislation, we have highlighted five that we are monitoring closely.

Canopy Growth: A Global Leader

Canopy Growth Corp. (WEED.TO) (CGC) is largest and most diversified Canadian marijuana producer with operations on five continents (North America, South America, Europe, Australia, and Africa). In late 2017, Canopy Growth received a $250 million investment from Constellation Brands (STZ) and this was a major catalyst for the entire cannabis market.

Going forward, we expect to see Canopy Growth to record incredible growth due to market trends as well as the investments and acquisitions completed over the last few years. The Canadian marijuana producer is very well capitalized and recently announced plans to raise up to $400 million.

The Canadian marijuana producer has been executing flawlessly and we would not be surprised if the company was acquired by Constellation Brands in the next 12 to 18 months. Over the next year, we expect to see big alcohol make significant acquisitions of Canadian cannabis companies and expect Canopy to be one of the first brands acquired. This is a stock that investors need to be monitoring.

Aurora Cannabis: A Long-Term Opportunity

Aurora Cannabis (ACB.TO) (ACBFF) has been nothing short of an execution story and is well positioned to capitalize on Canada’s recreational marijuana market. Over the last year, Aurora has made several strategic investments and acquisitions that we focused on increasing production capacity and market share.

From hemp/CBD to cannabis concentrates, Aurora is levered to some of the most exciting trends in the cannabis industry. The next year will be significant for the Canadian cannabis producer and we are bullish on the long-term opportunity.

Aurora Cannabis has been using its stock as a currency to make strategic investments and acquisitions. The company has been able to create something really special by these types of investments and this is a company that investors should be watching.

Choom Holdings Poised to Benefit

Choom Holdings (CHOO.CN) (CHOOF) is highly levered to Canada’s recreational marijuana opportunity and the passing of the legislation is very significant for the company. This is a stock we have highlighted several times during the last quarter and investors need to keep an eye on this one.

Choom currently operates two late stage applicants under Health Canada’s ACMPR and entered agreements to acquire two additional late-stage applicant craft growers in BC and Saskatchewan, including a facility in Sooke, British Columbia (expected to receive its cultivation license from Health Canada in the third quarter of 2018). Choom has executed on a plan diversify its retail geographic footprint into new provinces (British Columbia, Alberta, and Saskatchewan) and we are bullish on the continued execution.

Last week, Choom surged higher after Aurora Cannabis announced plans to invest $7 million in the company. Choom has secured rights to 17 retail leases in highly defensible locations throughout Alberta and this provides a strategic opportunity for the companies. This is a favorable market for the companies as Aurora has a significant presence in Alberta due to the company’s existing and operational production facilities in the province.

Choom has been laser focused on securing strategic partners, and supply agreements so as to develop and acquire strategic licenses and production assets to meet the anticipated demand from the recreational market. We are favorable on the opportunity to capitalize on a multi0billion-dollar market and cannabis investors need to monitor this one.

Emblem: The Most Undervalued Opportunity

Emblem Corp. (EMC.V) (EMMBF) is one of the most undervalued and underappreciated Canadian Licensed Producers (LPs) and we continue to monitor the recent trend. During 2018, Emblem has been under pressure and the shares have fallen almost 40% so far this year.

Although the trend has not been pretty, we consider Emblem to be one of the most exciting opportunities. With a market cap of approx. $165 million, the shares are trading at 2x cash (has more than $80 million in cash on the balance sheet) and the valuation is too attractive to ignore.

In the most recent quarterly report, registered patient number showed strong growth after the quarter ended and we expect fundamentals to improve significantly over the next year. Over the next year, we expect Emblem to prove to be a major turnaround story as the company continues to execute on growth initiatives.

TGOD: A Differentiated Opportunity 

In early May, The Green Organic Dutchman (TGOD.CN) (TGODF) commenced trading on the TSX exchange and this was one of the most highly anticipated new offerings. Over the last year, TGOD has been building something special and is constructing two massive facilities in Quebec and Ontario.

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