Canada’s Liberal government has paved the way for recreational use in the near future, boosting the value of these Canadian marijuana stocks or pot stocks.
Below you will find ten of the best Canadian marijuana stocks covered by our analysts.
SmallCapPower | September 24, 2018: Investing in Canadian marijuana stocks two years ago would have been a dream for most investors, as Canadian marijuana stocks soared due to favourable news for Canadian legalization in October. For instance, between the beginning of November 2017 and the end of January 2018, the Horizons Marijuana Life Sciences Index ETF (HMMJ) skyrocketed 92%, closing at $24.33 on January 9th, vastly outperforming other benchmarks such as the TSX-V, which increased 9% over the same period.
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Over the subsequent 7 months, between February and August 2018, HMMJ’s stock chart has remained relatively flat, but has seen significant growth in the past month, increasing nearly 40% to settle in at an all-time high of $25.95 on September 20, 2018. The growth has been fueled by a 24% rise by Aurora Cannabis (TSX:ACB) after rumours surrounding a potential partnership with Coca Cola (NYSE:KO) for cannabis related beverages.
Buying Canadian marijuana stocks today could still provide substantial returns to investors, especially leading up to legalization on October 17, however, investors should still be wary, as there is still a large amount of uncertainty surrounding Canadian marijuana stocks. If you are in the market for strong potential returns and are willing to stomach some risk, then check out our Top 10 Canadian Marijuana Stock Picks.
1. Canopy Growth Corp. (TSX: WEED) – $ 67.57
Canopy Growth Corporation, is a diversified multi-brand cannabis and hemp company, offering distinct brands and curated cannabis products with varieties in dried, oil and soft-gel capsule forms. In the past year, the Company has sold 6,200 kilograms of cannabis products to the Canadian medical market. The Company has also acquired the necessary agreements to export medicinal cannabis to Australia, Brazil and Germany. To position itself in the Canada’s recreational market, the Company has secured agreements with the Provinces of Quebec, Prince Edwards Island, New Brunswick, and Newfoundland & Labrador to supply their adult consumer market with high-quality cannabis. The Company has the largest licensed production platform in Canada, with over 600,000 sq. ft. of production space. To further solidify their leading position in the market, the Company expects to have up to an additional 5,000,000 sq. ft. of production over the next 12 months. On August 15, the Company announced a $5 Billion dollar investment by Constellation Brands (NYSE:STZ) to establish a global position and development of cannabis infused beverages.
- Market Cap: $ 15,441.6 Million
- EV/EBITDA Next Twelve Months: 178.0x
- Revenue Last Reported (CAD): $88.0 Million
- Debt, Last Reported (CAD): $620.3 Million
- 1 Month Total Return: 37.8%
- YTD Total Return: 127.2%
2. Aurora Cannabis Inc. (TSX:ACB)- $ 12.25
Aurora Cannabis is a licensed producer and distributer of medical cannabis. To prepare for the legalization of the adult consumer market for cannabis, the Company is substantially increasing its production capacity. ACB expects to have just under 1,000,00 sq. ft. of licensed production space and plans to produce at least 270,000 kilograms of cannabis annually. The Company also has 20% ownership interest in Liquor Stores N.A., the dominant alcohol retail chain in Western Canada. It intends to convert several existing outlets, as well as develop new stores, for the sale of cannabis to the recreational market. Additionally, the Company has signed a supplier agreement with the Province of Québec to supply cannabis for the province’s adult consumer market. Aurora has also embarked on an aggressive international expansion strategy that aims to have operations and/or sales in Germany, Denmark, Italy and Australia. On September 17, Bloomberg reported that Aurora Cannabis and Coca Cola (NYSE: KO) were in discussion for a partnership to develop cannabis related beverages. So far, no formal deal has been announced.
- Market Cap: $11,660.2 Million
- EV/EBITDA Next Twelve Months: 58.16x
- Revenue Last Reported (CAD): $42.0 Million
- Debt, Last Reported (CAD): $209.3 Million
- 1 Month Total Return: 61.0%
- YTD Total Return: 27.6%
3. Aphria Inc. (TSX:APH)- $ 19.96
Aphria is Canada’s third-largest cannabis producer by licensed capacity. The Company’s Leamington greenhouse facility provides them with the opportunity to be a scalable, low-cost producer of medical marijuana. APH sells medical marijuana and its derivatives through both retail sales and wholesale channels. Retail sales are sold primarily through the Company’s online store as well as telephone orders. Wholesale shipments are sold to other ACMPR Licenced Producers. By January 2019, the Company expects to increase their cumulative licensed greenhouse growing space to 1,000,000 sq. ft., increasing their annual production capacity from 9,000 kilograms to 100,000 kilograms. The Company currently has 44,000 sq. ft. of production space. The Company also recently acquired Nuuvera Inc., granting Aphria the only Canadian license to export medical cannabis to Italy. Using Nuuvera’s assets, it will focus on existing and future opportunities in established international cannabis markets including Germany, Italy, Spain, Portugal, Malta, and Australia. On September 20, 2018 the Company announced that it had signed supply and distribution agreements with all ten Canadian provinces and the territory of Yukon for cannabis branded products.
- Market Cap: $ 4,639.4 Million
- EV/EBITDA Next Twelve Months: 51.94x
- Revenue Last Reported (CAD): $36.9 Million
- Debt, Last Reported (CAD): $31.1 Million
- 1 Month Total Return: 75.5%
- YTD Total Return: 6.7%
4. Cannex Capital Holdings Inc. (CSE:CNNX)- $ 0.89
Cannex Group Holdings Inc. is a Canada based company with cannabis operations in Washington and California. Cannex is focused on premium indoor cultivation, extraction, manufacturing and branding of edible and derivative products, as well as retail operations. The Company’s subsidiary, BrightLeaf Development LLC, is the largest producer/processor in Washington State. Cannex is also in the process of acquiring Jetty Extracts, one of the largest processors and extractors in California. Cannex plans to produce from two indoor cultivating facilities with a combined 30,000 sq. ft. and 19,000 kg/year capacity, equating to one of the highest yields in the industry at 633 grams/sq. ft.
- Market Cap: $ 163.5 Million
- EV/EBITDA Next Twelve Months: 10.90x
- Revenue Last Reported (CAD): $15.4 Million
- Debt, Last Reported (CAD): $9.6 Million
- 1 Month Total Return: 1.1%
- YTD Total Return: 146.9%
5. Liberty Health Sciences Inc. (CNSX:LHS)- $ 1.20
Liberty Health Sciences was launched to acquire and operate U.S.-based companies in the medical cannabis market. Liberty adds value to acquired companies through its expertise in commercial-scale greenhouse growing using low cost, seed-to-sale certified processes, as well as automation and processing methods. In May 2017, the Company entered an exclusive Management Agreement with Chestnut Hill Tree Farm LLC, a state-licensed Florida nursery, as a dispensing organization of medical cannabis to patients in the State of Florida. Chestnut holds one of eight licenses granted in Florida, which currently represents approximately 14% of U.S. medical cannabis. On September 13, the Company announced a partnership with AdaViv Inc., an agricultural company, to develop new AI-driven analytics to increase cannabis crop yields.
- Market Cap: $ 406.8 Million
- EV/EBITDA Next Twelve Months: N/A
- Revenue Last Reported (CAD): $1.9 Million
- Debt, Last Reported (CAD): $9.4 Million
- 1 Month Total Return: 60.0%
- YTD Total Return: -42.0%
6. Sunniva Inc. (CNSX:SNN)- $ 5.72
Sunniva is a vertically-integrated medical cannabis company operating in in Canada and California. The Company aims to become the lowest cost, highest-quality cannabis producer in the markets by building large-scale purpose-built Current Good Manufacturing Practice (CGMP) greenhouses. Standards set by the CGMP offer better quality assurance with pesticide-free cannabis products to provide better patient and doctor access to cannabis education, and source better therapeutic delivery devices. SNN estimates it will complete its licensed 324,000 sq. ft. greenhouse production facility in Riverside County, California by Q3 2018. In Canada, it intends to have a 688,000 sq. ft. facility estimated to produce about 200,000 kilograms of cannabis annually.
- Market Cap: $ 183.3 Million
- EV/EBITDA Next Twelve Months: 31.61x
- Revenue Last Reported (CAD): $20.1 Million
- Debt, Last Reported (CAD): $23.3 Million
- 1 Month Total Return: -18.3%
- YTD Total Return: -36.0%
7. MPX Bioceutical Corp. (CNSX:MPX)- $ 0.93
MPX Bioceutical is a multinational diversified cannabis company in the medical and adult use cannabis markets. The Company plans to expand its influence in the U.S. through establishing 10 dispensaries and four production facilities in four states. The Company’s reputation is built on its profitable operations in Arizona, where it has two fully-operational Health for Life dispensaries and a third opening in Q2/2018. The Company has also recently acquired The Holistic Center, giving it a total of four dispensaries in Arizona. MPX is also constructing a 72,300 sq. ft. production facility in Canada. The Company expects to start cultivation in the second half of 2018, with a potential future expansion of 402,700 sq. ft. Collectively, MPX expects to have a production capacity of 9,000 kilograms of dried cannabis per annum and a capacity of 1,200 kilograms of concentrates. On August 1 the Company announced licensing approval to open two cannabis dispensaries in the state of Maryland.
- Market Cap: $ 357.9 Million
- EV/EBITDA Next Twelve Months: 22.06x
- Revenue Last Reported (CAD): $31.3 Million
- Debt, Last Reported (CAD): $57.9 Million
- 1 Month Total Return: 16.3%
- YTD Total Return: 13.4%
8. Supreme Cannabis Company Inc. (TSXV:FIRE) – $ 1.60
Supreme Cannabis Company is a licensed producer and distributor of cannabis under the ACMPR, focused on cultivating premium dried sun-grown cannabis flowers on a commercial scale through its subsidiary, 7ACRES. Currently, 7ACRES operates 40,000 sq. ft. of operational capacity expected to have an average output of approximately 5,000 kilograms of dried cannabis per year. Once completed, the Company expects the facility will span more than 342,000 sq. ft, producing 50,000 kilograms of premium dried cannabis per year at full capacity. On September 10, the Company announced a supply agreement with Tilray (NASDAQ: TLRY) that is estimated to be in excess of $2 million.
- Market Cap: $ 566.7 Million
- EV/EBITDA Next Twelve Months: 40.20x
- Revenue Last Reported (CAD): $5.3 Million
- Debt, Last Reported (CAD): $30.4 Million
- 1 Month Total Return: 52.1%
- YTD Total Return: -4.4%
9. Nanosphere Health Sciences Inc (CSE:NSHS) – $ 0.37
NanoSphere Health Sciences, Inc. has developed the patent-protected NanoSphere Delivery System, which delivers active pharmaceutical ingredients into the bloodstream and target receptors with an increased absorption. The NanoSphere Delivery System has transdermal, intra-nasal, and intra-oral delivery methods. In addition to cannabis applications, the technology has uses in pharmaceuticals, over-the-counter medications, and other medical applications. The Company sells its product under its Evolve Formulas, available in over 100 dispensaries in Colorado, as well as in Arizona and California.
- Market Cap: $ 38.5 Million
- EV/EBITDA Next Twelve Months: N/A
- Revenue Last Reported (CAD): $0.3 Million
- Debt, Last Reported (CAD): $0.0 Million
- 1 Month Total Return: -9.8%
- YTD Total Return: -45.6%
10. Emblem Corp. (TSXV:EMC) – $ 1.70
Emblem is a fully-integrated licensed producer and distributor of medical cannabis and cannabis derivatives in Canada. The Company’s Ontario facility currently consists of a 23,500 sq. ft. production building to cultivate cannabis for medicinal use and has a planned expansion to 17,000 kilograms of annual production. The Company has designed and has commenced construction of a 30,000 sq. ft. expansion to the existing facility. The Company is currently producing at the rate of approximately 120-150 kilograms of dried cannabis per month. To improve this rate to 150-180 kilograms per month, Emblem intends to break ground on its newly-acquired lands in the second quarter of 2018. The new facility is expected to add ~120,000 sq. ft. of greenhouse space. On September 13, the Company announced the launch of its first oral dose-metered cannabis spray allowing patients to precisely dose their cannabis medication.
- Market Cap: $ 155.1 Million
- EV/EBITDA Next Twelve Months: 5.22x
- Revenue Last Reported (CAD): $4.0 Million
- Debt, Last Reported (CAD): $24.1 Million
- 1 Month Total Return: 39.3%
- YTD Total Return: -25.4%
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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