Home » alcohol sin stocks » Aurora Cannabis To Open Cannabis Stores?

As reported in the Financial Post today, Aurora Cannabis acquired 19.9% stake in Liquor Stores N. A. Ltd, a company that operates retail liquor stores.

The approach seems to be two-pronged:

One strategy is to turn existing Liquor Stores into cannabis outlets. The other strategy is to create Cannabis stores.

Aurora may increase its stake up to 40%.

(Read the full article here in the Financial Post.)

This is a great strategy for Aurora. One of the biggest challenges facing pot sin stocks is distribution. It’s an already complicated marketplace and many marijuana stores seem a little shady and most of them appear to be on the verge of a big police raid.

So, an acquisition into a liquor store distribution company gives Aurora some advantages: it helps to create a distribution channel that already has some infrastructure in place… and, we’re not just talking about Walmart here; Aurora invested in a company that is already used to dealing with tightly controlled products. Therefore, there’s an awareness of the challenges and opportunities. Plus, there is a degree of legitimacy and authenticity with a company like Liquor Stores. You don’t feel like the police are going to bust down the door.

Of course we don’t know how this investment will turn out but Aurora has invested substantially, they can invest more if they want to, and this is a big win for both Aurora and Liquor Stores, so we’re bullish about this opportunity.

Sin stock investors should pay attention: not only because this has the potential to put Aurora into a stronger market leading position but also because if this turns out to be a great strategy, we should see other marijuana companies building relationships with other liquor store operators.


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