The Companies That Could Benefit From An Aurora Cannabis-Coca-Cola Deal

A rising tide lifts all ships. And nowhere is this more relevant than in the cannabis space.

Just look at the deal Canopy Growth Corp CGC landed with Constellation Brands STZ just two months ago. That deal, which had Constellation Brands pony up $4 billion for a piece of Canopy, launched a huge run on cannabis stocks. While Canopy Growth Corporation shot up nearly 30 percent on the news, we saw roughly a half dozen other cannabis stocks tack on double-digits gains too. Take a look: 

The bottom line is that not only was this deal huge for Canopy Growth, it was also huge for the industry. For years, insiders and analysts had been talking about the day when the big, multinational behemoths would come knocking.  The evidence was there that the cannabis industry was primed for monstrous growth, and it was only a matter of time before the world’s biggest brands would put their chips on the table. That’s exactly what happened, and there will be more.

Does Cannabis Go Better With Coke? 

The Coca-Cola Co KO said it was closely watching the cannabis-infused drinks market, Reuters reported Monday. The company was responding to a report from BNN Bloomberg about the maker of Coca-Cola being in talks with Aurora Cannabis Inc ACBFF.

While nothing is set in stone, the mere suggestion sent shares of ACB soaring more than 20 percent. If such a deal comes to fruition, it's likely the market will see a repeat of what occurred after the Constellation-Canopy Growth Deal was announced.

Related Link: Opinion: It's Time To Have Active Managers Run Cannabis Investments

Not only would ACB get a massive boost, but other major cannabis players, such as Aphria Inc APHQF, OrganiGram Holdings Inc OGRMF, and Canopy Growth would likely benefit as well.

A Potential Winner In Green Organic Dutchman 

One particular stock that could get a little extra momentum from a Coca-Cola-Aurora deal is Green Organic Dutchman Holdings Ltd TGODF, as Aurora owns about 17 percent of this company. Furthermore, Aurora also has an option to increase its stake to more than 50 percent.

The Green Organic Dutchman is one of the largest organic cannabis brands in the world. This is an incredibly valuable asset to a company that could be vying to do a deal with a major player like Coca-Cola. 

Of course, such a deal between the two companies is still an illusion; it doesn’t yet exist. But make no mistake: investors looking for a repeat of the trading action after the Constellation-Canopy Growth deal was announced are eagerly anticipating the next one. And, if Aurora is it, there’s a very good possibility that TGOD would receive serious attention. 

Javier Hasse, director of Benzinga’s cannabis newsdesk, contributed to this report.