Sundial Growers Inc (NASDAQ: SNDL) is screaming for the top in the premarket hours this morning, following up on the dramatic gains that we saw out of the stock yesterday. Ultimately, there are multiple reasons why the stock is headed up. Hopes of an acquisition are being exacerbated by two key votes that will take place this week. Here’s what’s going on:
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SNDL Stock Flies Ahead Of Two Key Votes
As mentioned above, Sundial Growers has been climbing in the market as of late, and for good reason. Investors have been hoping for an acquisition sending values sky high. Now, there are two key votes on the horizon that may greatly expand the possibility of a takeover.
Both the United States House of Representatives and the United Nations will vote on the decriminalization of cannabis across their respective regions. This is big news. Should the United States and United Nations decriminalize cannabis, two of the world’s largest economies will be one step closer to full legalization.
In the United States, this is highly likely, which bodes well for SNDL. With Joe Biden taking the win in the United States Presidential Election, there will be a need to get taxes in where they can fit in as Biden has very expensive plans. As a result, there’s a high likelihood that even if this week’s vote doesn’t go well, cannabis will soon work its way to legalization across the United States.
So, what does this mean for a struggling Canadian cannabis company? Everything!
If the legalize cannabis wave hits the United States and United Nations, two of the world’s largest economies could open the doors to the product. Should this take place, every major cannabis company and likely many tobacco and alcohol companies, will be gearing up for acquisitions of smaller players that can be consolidated to tackle the market.
With SNDL actively seeking alternatives, including the potential sale of the company, there’s a strong likelihood that it will be a perfect target for several of these companies.
More On A Potential Acquisition
Moreover, there has been a growing trend away from dried cannabis flower and toward cannabis vape products. Sundial was on the leading edge of this evolution, and has focused heavily on the provision of vapes. As a result, there’s another notch in the company’s belt as a great acquisition target.
This, combined with a trend of legalization, and a ridiculously low price considering recent declines, makes a SNDL takeover a very highly likely outcome.
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The Bottom Line
The bottom line here is simple. Sundial may have struggled in the past, but it’s in the right position at the right time today. As the company continues to look for strategic alternatives, it seems as though the stars and planets are aligning perfectly, to make the company the most valuable it can be. All in all, it’s hard to ignore the opportunity that SNDL stock represents.
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