With a scant couple of months to go before rec marijuana becomes a legal reality, Canada’s pot co’s are still jockeying for position in the yet-to-be-realized industry, as mergers and acquisitions big and small continue to play out. One of the most interesting issues remaining unresolved in the space is whether Canopy Growth (TSX:WEED) or Aurora Cannabis (TSX:ACB) will end up on top once the dust has settled. According to Bruce Campbell, president and portfolio manager at StoneCastle Investment, the race may be a tight one at the moment, but the edge goes to Canopy Growth.

In terms of timelines, Bill C-45 currently sits before Senate committees, with a third reading of the so-called Cannabis Act expected on or before June 7, after which the federal Liberal government intends on instantiating a lag period of a number of weeks to allow industry players and provincial regulators to finish up preparation for legalization. That means that very soon the provinces will be expecting cannabis producers to come through with the literally tonnes of dried cannabis needed to meet the expected demand.

Both Canopy Growth and Aurora have developed their own approaches to establishing a beachhead in the nascent industry. Canopy has focused on ensuring that they have a stake in each of the ten provinces and three territories’ cannabis trades, while Aurora has made more splashy moves on the acquisition front, including its merger with CanniMed earlier this year and, now, with rumours flowing about a potential deal with MedReleaf (TSX:LEAF).

“That’s quite a dogfight,” says Campbell, in conversation with BNN Bloomberg. “It’s a tough one to figure out. I think that both companies have been fairly aggressive with their moves.”

“If I had to pick one, I would probably pick Canopy. I just look at their depth and all the pieces that they have in different areas. I think that they’re probably developing a more sustainable, diverse company,” he says.

“That being said, Aurora has gone out and made a lot of acquisitions in areas, as well,” says Campbell. “[But] it seems to me that from a valuation perspective, until they get Aurora Sky and Aurora Sun up and running, they probably need to do some backfill on their valuation.”

Both Canopy and Aurora saw their share price go through the roof in December and January of this year, only to fall back to Earth by February. Since then, aside from a few ups and downs, both stocks — along with almost all of the public pot companies — have been trading sideways.

On the potential merger of Aurora with Markham, Ontario’s MedReleaf, Campbell says there’s likely some truth to the rumours.

“That’s obviously going to leapfrog [Aurora] from a market cap standpoint bigger than Canopy,” he says. “There’s a lot of smoke there, and typically where there’s smoke, there’s fire, but you never know. Things change so fast, [but] just the fact that MedReleaf’s shares moved up so much just after the rumours were out there, maybe they walk away because the valuation became too expensive. It’s really hard to tell until the news is actually announced.”