With record cannabis production coming online, the Canadian pot stocks on our list may begin to wilt soon
SmallCapPower | April 7, 2017: Retail investors are ecstatic about the ‘Green Rush,’ or in other words, Canada’s budding marijuana market. With Canada setting a motion to legalize marijuana for July 1, 2018, Canadian pot stocks such as Canopy Growth and Aphria have more than doubled in the past year. Presently, there appears to be a supply shortage, as the recreational marijuana market is substantially larger than the medicinal cannabis market. However, looking ahead, companies such as Aurora Cannabis have projects underway that would bring about 100,000 Kg of annual cannabis production. What’s more, the majority of cannabis companies are cash flow negative, but report profits due to a re-valuation of the inventory. Today we have identified five licensed marijuana producers and their present and future dry cannabis production capacities. With shares of some producers up as much as 10-fold over the past couple of years, there are signs of an impending marijuana bubble as supply and demand tighten.
Aurora Cannabis Inc. (TSXV: ACB) – $2.66
Aurora Cannabis Inc. is engaged in the production and sale of medical cannabis pursuant to the Access to Cannabis for Medical Purposes Regulations (ACMPR). The Company’s product types include Tetrahydrocannabinol (THC), Cannabidiole (CBD), indica, sativa and hybrid. Its product range includes BLACK TUSK 2, CHESTER, KAINE and TOWER. The CBD product is connected to the anti-inflammatory, pain relieving, anti-nausea, anti-anxiety and muscle relaxing functions of medical marijuana.
- Market Cap: $631.5 million
- Revenue (LTM): $8.3 million
- 2017 Dry Cannabis Capacity: 7,000 Kg
- Future Dry Cannabis Capacity: 100,000 Kg
Canopy Growth Corp. (TSX: WEED) – $10.03
Canopy Growth Corporation, formerly Tweed Marijuana Inc., is a diversified cannabis company that 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. Tweed’s built-out production capacity is over 10 climate controlled indoor growing rooms. Bedrocan is a medical-grade cannabis.
- Market Cap: $1,207.4 million
- Revenue (LTM): $22.90 million
- 2017 Dry Cannabis Capacity: 30,000 Kg
- Future Dry Cannabis Capacity: n/a (growing through acquisitions)
Aphria Inc. (TSX: APH) – $7.22
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: $671.7 million
- Revenue (LTM): $11.50 million
- 2017 Dry Cannabis Capacity: 7,500 Kg
- Future Dry Cannabis Capacity: 70,000 Kg
OrganiGram Holdings Inc. (TSXV: OGI) – $2.78
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 Marihuana Medical Access Regulations (MMAR) of the Government of Canada.
- Market Cap: $209.9 million
- Revenue (LTM): $7.20 million
- 2017 Dry Cannabis Capacity: 16,000 Kg
- Future Dry Cannabis Capacity: 26,000 Kg
Supreme Pharmaceuticals Inc. (CSE: SL) – $1.70
Supreme Pharmaceuticals Inc. is a Canada-based development-stage company that is focused on developing businesses in the cannabis market, with a specific focus on the wholesale sector of the medical cannabis market in Canada. The Company operates an approximately 342,000 square foot greenhouse facility located in Kincardine, Ontario. The Company has not generated revenues from its operations.
- Market Cap: $196.3 million
- Revenue (LTM): $0
- 2017 Dry Cannabis Capacity: 0 Kg
- Future Dry Cannabis Capacity: 50,000 Kg
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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