So Chris Parry had a really good take on the news this week about the TSX suddenly deciding that Drugs Are Bad(™) and in case the great elephant to the south rolls over and squishes companies with U.S. marijuana assets – and I suggest you look at it here. (link)
What I think is interesting 24 hours later is to take a look at how two companies have jumped out of the gate using their news releases as opening salvos to signal their strategies. When I was working in government I often drafted these kinds of releases. Whatever the text was, our subtext was clear to our stakeholders.
So let’s see what Aphria (T: APH), their partner Tetra Bio-Pharma (C: TBP) and Harvest One Cannabis (C: HVST) have said publicly since the TSX announcement, and to gild the lily, I shall illustrate my point with GIFs from The Simpsons.
Aphira and Tetra Bio-Pharma:
The subject of Chris Parry’s piece. The day after the TSX decided to get religion, Aphira secures a deal with Tetra Bio-Pharma to market it’s medical cannabis blend under canadian medical cannabis regulations. (link)
First things first – this is cool on it’s own merits, Aphira has a big fancy – big pharma partner who has expertise in government relations and regulation. In the wild west drawing first means winning the gunfight, and this is a quick-draw move.
What’s more interesting to me, is the clear sign Aphira is sending. My experience tells me there had to be a serious discussion whether or not to go ahead with this announcement after the TSX. By moving forward, Aphira and Tetra-Pharma are making it clear they are not worried about the big boogeyman to the south.
Harvest One on the other hand, sent out a classic mealy-mouthed flack milquetoast bare-bones CYA news release. (link)
Its the PR equivalent of showing up to school on free dress day in uniform. Harvest One wants investors and regulators to see what good boys they are.
I am definitely not faulting them for this approach, its likely the suggestion I would make if I was in their PR shop. It’s a safe course.
Ultimately both companies are saying they want to stay in the game, and choosing two different strategies. Investors should decide which management strategy will pay off and make their decisions accordingly.
Personally, I say no guts, no glory.