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 | January 11, 2019: The Canadian government legalized cannabis for recreational use on October 17, 2018, opening a projected $5.7 billion-dollar market for investors. Over the past year, investments in cannabis companies have yielded impressive returns; the Horizons Marijuana Life Sciences Index ETF (HMMJ) skyrocketed 165%, between October 2017 and October 2018, vastly outperforming other benchmarks such as the TSX-V, which declined 11% over the same period. However, there is still a large amount of uncertainty surrounding Canadian marijuana stocks particularly if demand for cannabis products outweigh production capacity from licensed producers. Financial results capturing the full effects of legalization will not be released until early 2019. These results could spark another sector wide rally if they are stronger than anticipated. More recently, the industry has seen further declines after a short-seller report by Hindenburg Research targeted Aphria (TSX:APHA) on December 3, 2018, accusing the Company of purchasing Latin American assets at “inflated prices” for the benefit of insiders. The allegations spooked investors in the industry and sparked a sector wide sell-off, which the industry has yet to completely recover from. 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.
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1. FSD Pharma (CNSX:HUGE)- $ 0.42
FSD Pharma is an ACMPR licensed cannabis company utilizing hydroponic production techniques to cultivate and process cannabis. Operating out of Cobourg, Ontario, the Company’s potential 3.8 million sq. ft. production facility could become the world’s largest facility of its kind upon completion. FSD Pharma is involved in several partnerships that provide the Company with strategic exposure to a variety of cannabis products, including pharmaceuticals, beverages, and topicals. The Company aims to target all aspects of the cannabis industry – cultivation, processing, extracts and research and development. FSD Pharma maintains a strong balance sheet position with over $35 million in cash and equivalents, allowing the company to continue to meet its short-term obligations and make strategic investments. On October 22, 2018, the Company signed an LOI to acquire Therapix Biosciences, a specialty pharmaceutical company developing cannabinoid-based treatments.
- Market Cap: $ 570.1 Million
- Revenue: $29.4 Million (3 months ended June 30, 2018)
- 1-Month Total Return: +31.8%
- 1-Year Total Return: +250.0%
2. Cronos Group Inc. (TSXV:CRON)- $ 17.11
Cronos Group is a vertically integrated, Canada-based cannabis company with a diversified global presence. The Company invests in establishments that are licensed or are seeking a license to produce and sell marijuana. Focusing investment efforts on firms located in Canada, Cronos Group operates through its subsidiaries and producers. The Company has several international distribution and production platforms, and strives increase its global presence through developing intellectual property and building an international portfolio. The portfolio includes Peace Naturals, Original BC, and Whistler Medical Marijuana Company, all companies licensed to produce, sell, and cultivate medical marijuana or cannabis oil. The Company’s existing capacity is 355,500 sq. ft., with an annual estimated production capacity of 40,150 kg. With an expansion underway, Cronos Group expects an increase of 910,000 sq. ft. of it production facility, with an estimated annual production capacity of 77,000 kg. On December 7, 2018, the Company released that it has entered into an agreement with Altria Group, Inc. (NYSE:MO), which has agreed to a strategic investment of ~C$2.4 Billion into Cronos Group.
- Market Cap: $ 3.1 Billion
- Revenue: $3.8 Million (Q3 2018)
- 1-Month Total Return: -0.1%
- 1-Year Total Return: +28.1%
3. Canopy Growth Corp. (TSX: WEED) – $ 44.50
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. The Company’s extensive supply agreements with Canadian provinces allow Canopy to lock in sales of 67,500 kg of product per year. 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. More recently, the Company reported its Q2 2019 financial results on November 14, 2018. Canopy reported $23.3 Million in revenue, an average selling price of $9.87, and cash on hand of $429 Million.
- Market Cap: $ 15.3 Billion
- Revenue: $ 23.3 Million (Q2 2019)
- 1-Month Total Return: -6.7%
- 1-Year Total Return: – 6.2%
4. Cannex Capital Holdings Inc. (CSE:CNNX)- $ 0.83
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. On November 1, 2018, the Company announced it had acquired a 10% interest in Soma Group Holdings, a New Zealand-based cannabis start-up providing Cannex with an innovative research platform.
- Market Cap: $ 152.5 Million
- Revenue: US$ 1.1 Million (Q1 2019)
- 1-Month Total Return: -4.6%
- 1-Year Total Return: -38.1%
5. Supreme Cannabis Company Inc. (TSXV:FIRE) – $ 1.75
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. On November 13, 2018, FIRE announced a partnership with MediPharm Labs to launch a line of cannabis oil products.
- Market Cap: $ 507.1 Million
- Revenue: $ 5.1 Million (Q1 2019)
- 1-Month Total Return: +22.4%
- 1-Year Total Return: -40.1%
6. Liberty Health Sciences Inc. (CNSX:LHS)- $ 1.12
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. On November 21, 2018, Liberty Health Sciences announced plans to open 5 additional dispensaries in Florida, bringing the total dispensary count to 12 by the end of 2018.
- Market Cap: $ 383.0 Million
- Revenue: $ 1.1 Million (Q1 2019)
- 1-Month Total Return: +17.9%
- 1-Year Total Return: -45.6%
7. Aurora Cannabis Inc. (TSX:ACB)- $ 7.17
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 supply agreements with 12 provinces and territories comprising over 98% of the Canadian population. 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. On November 12, 2018, Aurora announced its Q1 2019 financial results. The Company reported revenues of $29.6 Million and gross margins on cannabis sales of 70%.
- Market Cap: $ 7.2 Billion
- Revenue: $ 29.6 Million (Q1 2019)
- 1-Month Total Return: -6.5%
- 1-Year Total Return: -46.2%
8. Sunniva Inc. (CNSX:SNN)- $ 4.75
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. On October 17, 2018, the Company signed an LOI to acquire a licensed cultivation and genetics facility in Northern California, providing Sunniva with current production capacity of 1,600 lbs per year.
- Market Cap: $ 180.9 Million
- Revenue: $ 4.5 Million (Q2 2018)
- 1-Month Total Return: +54.2%
- 1-Year Total Return: -46.9%
9. Aphria Inc. (TSX:APHA)- $ 8.92
Aphria is one of Canada’s largest cannabis producers 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’s acquisition of Nuuvera Inc. granted Aphria a license to export medical cannabis to Italy. Aphria began trading on the NYSE on November 2, 2018. On December 3, 2018, Hindenburg Research released a short-seller report accusing Aphria of purchasing Latin American assets at inflated prices for the benefit of company executives and insiders. As of December 17, 2018, the Company has yet to release a comprehensive rebuttal against the allegations.
- Market Cap: $ 2.2 Billion
- Revenue: $ 13.3 Million (Q1 2019)
- 1-Month Total Return: +18.5%
- 1-Year Total Return: -60.5%
10. Nanosphere Health Sciences Inc (CSE:NSHS) – $ 0.24
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. On November 7, 2018, NanoSphere announced that its Evolve Formulas Transdermal NanoSerum CBD product has been well received in the Colorado market, having moved over 1,000 units in less than a month.
- Market Cap: $ 24.3 Million
- Revenue: $ 0.2 Million (3 months ended June 30, 2018)
- 1-Month Total Return: -11.1%
- 1-Year Total Return: -70.7%
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