Tweed: Medical Marijuana in Canada

07/16/2015 9:22 am EST

Focus: STOCKS

Jimmy Mengel

Editor, Outsider Club

I am very bullish on the medical marijuana industry. Now, at long last, a new king of pot stocks has been crowned, argues Jimmy Mengel, editor of The Crow’s Nest.

Two major players in the medical marijuana space have joined forces: Tweed Marijuana (TSV.TWD) and Bedrocan Cannabis (TSV.BED) have agreed to merge, which marks the first major merger and acquisition in the nascent market.

Tweed is a consumer-driven marijuana company that famously operates at the old Hershey Chocolate factory in Smith Falls, Ontario. It was the first publicly-traded cannabis company in Canada.

Bedrocan is focused more on the medical side of things. It has developed strains of medical marijuana for patients with chronic pain, fibromyalgia, multiple sclerosis, arthritis, epilepsy, anxiety and depression, Crohn's disease, and multiple other medical conditions.

Bedrocan has over 15 years of research experience, starting in the Netherlands. They are considered to be the foremost experts when it comes to developing research-based marijuana strains.

It's a perfect partnership in the sense that Bedrocan has a ton of experience growing medical-grade marijuana, while Tweed has a very slick set of consumer brands and more capital market experience.

Together they present a very formidable company that has already set itself up to be the undisputed leader in the medical marijuana sector.

When the deal is official, the merged companies will sport a market cap three times the size of the next-largest competitors. More importantly, they will represent about 25% of all registered patients in Canada.

I followed up with Tweed's communications director Jordan Sinclair and he expects there will be no real hurdles to the acquisition and all parties seem very excited about the deal.

I'm recommending Tweed under $2.00 for now as the merger comes to pass. They will be the undisputed leader in the Canadian medical marijuana space, which is expected to become close to a $2 billion industry within two years.

They will also be in a great position to expand globally as more and more markets relax the sale of medical and recreational marijuana, which is the end game here.

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More from MoneyShow.com:

The Marijuana Business Is Booming: Green Is the New Gold

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