CannTrust Holdings Looks Appealing Following Financial Results

In this market news, CannTrust Holdings Inc. (TSX:TRST), one of the Canadian marijuana stocks, said its third-quarter revenue jumped more than 100%

SmallCapPower | November 21, 2018: CannTrust Holdings Inc. (TSX:TRST), one of the Canadian cannabis stocks, late Wednesday reported its third-quarter financial results. In Q3 2018, revenue surged 105% to come in at $12.59 million compared to $6.14 million in the corresponding quarter last year. For 9M 2018, revenue came in 115% higher at $29.48 million. The rise can be attributed to an increase in average revenue per gram of medical cannabis ($8.77 in Q3 2018 versus $8.10 in Q3 2017) and an increase in total dried cannabis sold (including equivalents extracts). Further, the number of active patients increased 61% on a YoY basis.

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CannTrust Holdings posted a gross margin of 99.6% and a positive EBITDA of $0.56 million in the quarter. Net income for Q3 2018 and 9M 2018 amounted to $0.42 million and $11.97 million, respectively, compared to net income of $0.66 million and $0.63 in the comparable 2017 periods. Earnings per share (EPS) for Q3 2018 and 9M 2018 was $Nil and $0.12, respectively, compared to an EPS of $0.01 and $0.01 in the comparable 2017 periods.

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CannTrust Holdings Chairman of the Board Eric Paul said, “We are extremely pleased with our Q3 results that are a testament to the success of this Company and the incredible progress that we have made in such a short period of time. With the opening of the recreational market and the numerous opportunities that our Company is positioned to capitalize on, this is only the beginning. The appointment of Peter Aceto as CEO, a globally recognized and seasoned professional, will be the perfect complement to our leadership team and will lead our Company into the next phase of our rapid growth.”

CannTrust Holdings has entered into supply agreements with nine Canadian provinces to supply recreational cannabis across Canada. The Company launched a fourth recreational brand named ‘Peak Leaf’ and started shipping cannabis oil to Denmark. TRST has entered into an exclusive partnership agreement with Kindred Partners Inc., a wholly-owned Canadian subsidiary of Breakthru Beverage Group, to provide sales support for recreational products and to subscribe for 902,405 common shares for gross proceeds of $9.2 million.

The Company has also entered into a strategic partnership with Australian licensed producer, Cannatrek Ltd for expanding its global reach. Furthermore, it acquired a 19.4 acre property adjacent to the Niagara Greenhouse Facility, giving CannTrust Holdings capacity expansion.

CannTrust Holdings CEO Peter Aceto stated, “Our Q3 results attest to the great work Eric and the Company have done and I look forward to building on this platform. The legalization of the adult consumer recreational market is only the beginning of many new and exciting opportunities for the Company. We look forward to boldly executing on our vision for CannTrust both at home and abroad.”

CannTrust Holdings stock currently trades at a market capitalization of C$870 million with a price-to-book multiple of 5.3x.

Disclosure: Neither the author nor his family own shares in the company mentioned above.

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