The Canadian marijuana stocks on our list have good longevity, growth prospects
SmallCapPower | August 2, 2017: Identifying companies in great financial health is important when investing in a new industry such as marijuana. Most companies in the industry operate at a loss, meaning their book value deteriorates year after year and their cash position bleeds, impeding their ability to meet obligations. Companies in good financial health do not experience many of these problems, although they may operate at a loss, they have a significant cushion in the term of current assets to meet current obligations, and their low debt to equity ratios de-risk the balance sheet. That being said, the Canadian marijuana stocks on our list all have current ratios of at least 10x, and debt to equity ratios under 20%.
Cannabix Technologies Inc. (CSE: BLO) – $0.60
Advanced Medical Equipment & Technology
Cannabix Technologies Inc is a Canada-based company, which is engaged in Marijuana Breathalyzer development for law enforcement and the workplace. The Company is developing breath testing technologies in the pursuit of bringing durable, portable hand-held tools to the market to enhance detection of marijuana impaired driving offences on roads. The Company offers Beta 2.0 Cannabix Marijuana Breathalyzer. The Company is developing drug-testing devices that detect the psychoactive component (THC) of marijuana that causes intoxication-using breath samples. The Company also develops breath-testing devices for detection of use of THC, in contrast to urine testing for THC metabolite that requires an invasive collection and reflects use days or even weeks earlier.
- Market Cap: $37,904,567
- Current Ratio: 503x
- Debt/Equity: 0%
OrganiGram Holdings Inc. (TSXV: OGI) – $2.40
Pharmaceuticals
OrganiGram Holdings Inc., formerly Inform Exploration Corp., is a Canada-based company, which operates through its subsidiary Organigram Inc. Organigram Inc. is a licensed medical marijuana producer as regulated by Health Canada under the Marijuana Medical Access Regulations (MMAR) of the Government of Canada.
- Market Cap: $248,551,668
- Current Ratio: 17x
- Debt/Equity: 17%
Canopy Growth Corp. (TSX: WEED) – $9.03
Pharmaceuticals
Canopy Growth Corporation, formerly Tweed Marijuana Inc., is a diversified cannabis company. The Company, through its subsidiaries Tweed Inc. (Tweed), Bedrocan Canada Inc. (Bedrocan) and Tweed Farms Inc. (Tweed Farms), is engaged in the business of producing and selling legal marijuana in the Canadian medical market. It is also focusing on producing and selling marijuana in the recreational market in Canada. Its core brands are Tweed and Bedrocan. Tweed is a licensed producer of medical marijuana. Tweed’s commercial license covers approximately 168,000 square feet of its Smiths Falls facility and allows Tweed to produce and sell approximately 3,540 kilograms of medical marijuana per year.
- Market Cap: $1,519,996,359
- Current Ratio: 10x
- Debt/Equity: 2%
Aphria Inc. (TSX: APH) – $6.46
Pharmaceuticals
Aphria Inc., formerly Black Sparrow Capital Corp., is a Canada-based company, which is engaged in producing and selling medical marijuana through retail sales and wholesale channels. The Company’s retail sales are sold primarily through the Company’s online store, as well as telephone orders. Its wholesale shipments are sold to other Medical Purposes Regulations (MMPR) Licensed Producers. It offers medical cannabis of various strains, including Kusawa, Tamaracouta, Panache, Churchill and Iroquois. The Company is also engaged in the research and development, and commercial production of cannabis oil.
- Market Cap: $896,773,996
- Current Ratio: 17x
- Debt/Equity: 12%
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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