Activist investor takes cannabis action

By Jonathan Jackson. Published at Mar 15, 2019, in Features

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You may have heard of activist investor Nelson Peltz. The billionaire (worth approximately $1.6 billion) is the founder of investment firm Trian Fund Management, which has more than $11 billion in assets under management.

Trian has a highly concentrated portfolio that includes stakes in Bank of New York Mellon, DuPont and food conglomerate Mondelez International.

If that didn’t make Peltz a busy man, add is his board positions with fast-food chain Wendy’s Co., Proctor & Gamble, food services giant Sysco Corp. and The Madison Square Garden Co.

That’s a wide variety of interests, which Peltz has been criticised for. He has also been accused of being adversarial as Trian push for changes in companies hey have invested in that will increase market value. Clearly, however, the opinions of others don’t matter much to him as the next vertical he chases is something that not long ago, wouldn’t have been a consideration.

Cannabis.

That’s right the hedge fund billionaire is endorsing a cannabis play and the market has reacted kindly.

Peltz will join Aurora (TSE:ACB), the $12 billion capped cannabis company that has eight licensed production facilities and operates in 18 countries.

The stock rose by over 14% on the back of the Peltz announcement and the news that he will work with Aurora to seal new co-operation agreements and expand globally.

Peltz said in a statement: “I believe Aurora has a solid execution track record, is strongly differentiated from its peers, has achieved integration throughout the value chain and is poised to go to the next level across a range of industry verticals. I also believe that Canadian licensed producers, and Aurora in particular, are well positioned to lead in the development of the international cannabis industry as regulations evolve.”

To see what Aurora executive chairman Michael Singer had to say about the appointment and the future of the cannabis industry click here.

Singer told Bllomberg: “Nelson comes with a phenomenal track record and was very excited about the growth opportunity here at Aurora. He isn’t as antagonistic as some of the market may portray him to be and he collaborates closely with the company’s board and management, and we thought that recipe and his deep connection to global businesses that we think are going to be value-added to our business going forward was the right recipe.”

Aurora said it will work “collaboratively and strategically to explore potential partnerships that would be the optimal strategic fit for successful entry into each of Aurora’s contemplated market segments.”

Peltz will receive 20 million options for shares at CAD10.34.

Big names are now being attracted to cannabis business pursuits. Martha Stewart and Snoop Dog are baking. Whoopi Goldberg and Melissa Etheridge have both put their money into medical cannabis based projects, Chelsea Handler was named a keynote speaker at the World Cannabis Congress in 2018 and recently invested in cannabis lifestyle company, Civilised. Then there’s Mike Tyson, Gene Simmons, Law & Order creator Dick Wolf, NBA star Cliff Robinson.

The cannabis revolution is coming, if it’s not already here and it seems like it could be a worthwhile investment.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

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S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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