Hiku Brands Company Ltd (CNSX:HIKU) (OTCMKTS:DJACF) A Breakout Stock On Acquisition Talk

Hiku Brands Company Ltd (CNSX:HIKU) (OTCMKTS:DJACF) is an emerging break out play if recent price action activity is anything to go by. After coming under pressure on rallying to highs $4.50, the stock has bounced back in what appears to be a continuation of the long-term uptrend.Hiku Brands Price ActionInvestor confidence in the stock has received a boost on the confirmation Hiku Brands is an acquisition target for Canopy Growth. Amidst the acquisition talk, the company has shown it remains focused on its long-term growth plans, on the signing of sales and distribution deals in recent weeks. DJACF Daily ChartThe stock is currently trading at the $1.8 mark while facing resistance at the $2 a share mark as part of the emerging uptrend. A rally followed by a close above the $2 mark should open the door for the stock to make run for the $2.5 mark which appears to be the next resistance level. Above the $2.5 mark, the stock should surge to highs of $3.6 a share.Hiku Brands stock faces immediate support at the $1.5 mark, below which it remains susceptible to further declines to the $1 share handle. Taking into consideration recent price action activity, it would be safe to say chances are high the stock will continue powering high, on strong fundamentals while awaiting to see the outcome of the canopy Growth acquisition push.About Hiku BrandsHiku brands is a cannabis-focused company that cultivates and sells cannabis products pursuant to ACMPR act. The company also boasts of unsurpassed retail experience complemented by handcrafted cannabis production. Through its wholly owned subsidiary, DOJA Cannabis, the company owns two production facilities at the heart of British Columbia’s Okanagan Valley.Why is Hiku Brands Surging High?Canopy Growth has entered into a definitive agreement for the acquisition of all outstanding shares of Hiku Brands Company. Under the terms of the agreement Hiku brands, shareholders are to receive 0.046 shares of a Canopy Growth share in exchange for each share held. The acquisition prices represent a 33% premium to the stock 20-day volume weighted average weight price.

"This Transaction represents an incredible step in the Hiku journey that both realize immediate benefits for our shareholders and at the same time provides an unparalleled opportunity to join forces with a preeminent global cannabis player,” said CEO Alan Gartner.

The acquisition should go a long way in strengthening Canopy Growth diversity and range of brands in addition to providing it with access to various demographic segments. The two should also be able to leverage each other portfolio of established brands through retail stores distributed across the country.Sales Supply AgreementsAmidst the signing of the merger agreement, Hiku Brands continues to strengthen its distribution channel as it continues to explore new sales avenues. The company has since entered into a supply agreement with Ontario Cannabis Store for the supply of branded cannabis online.The agreement will come into effect on October 17, 2018, and will provide Hiku Brands with access to 25 SKUs for sale in the Ontario market. The cannabis products on offer will be available in various formats ranging from raw flower, oils, and pre-rolls.According to the Chief executive officer, Alan Gartner, the agreements affirm the company’s drive to become the first vertically integrated cannabis company with state of the art grow facilities. The supply agreement should go a long way in strengthening the company’s retail footprint.

"With a growing number of retail stores, the potential of Tokyo Smoke cannabis stores in Ontario, our increased grow facility space, additional supply agreements across the country, and strategic investments in Canada and beyond, Hiku is poised to be a leader in the adult-use cannabis sector,” said Mr. Garner.

In addition to the Ontario Cannabis Store agreement, the company has also signed a supply agreement with British Columbia Liquor Distribution Branch. Under the terms of the agreement, the company is to start supplying cannabis for adult use once legalization comes into effect in October. The agreement follows the similar agreement in Manitoba as well as with Tokyo Smoke.What Next For Hiku CannabisCanopy admitting that Hiku equals brands underscores the amount of respect the company commands in the multi-billion industry. The signing of a string of supply agreements also affirms the company’s focus on sales as it looks to strengthen its revenues streams.The stock also looks set to continue powering high as investors react to the Canopy growth acquisition talk. Hiku Brands is an exciting break out stock backed by solid fundamentals, after the recent pullback.We will be updating our subscribers as soon as we know more. For the latest updates on HIKU, sign up below!Disclosure: We have no position in HIKU and have not been compensated for this article.