The Canada-listed cannabis stocks on our list have reported net profit margins well above the industry average in their most recent quarter
SmallCapPower | May 30, 2019: Net profit margin is net income as a percentage of revenue. In a new, high-growth industry, such as cannabis, it is uncommon to see positive net profit margins. This is because companies are burning cash to grow their business and typically have not reached their full revenue potential. However, there are some exceptions. Today we have identified four Canada-listed cannabis stocks that have posted net profit margins well above the industry average in their most recent quarter. For reference, the average net profit margin from our sample size of 163 small cap, Canada-listed cannabis stocks was -42.9%.
*Share prices as at close Tuesday, May 28, 2019, data obtained from S&P Capital IQ
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CannTrust Holdings Inc. (TSX:TRST) – $7.94
Cannabis
CannTrust is a federally-licensed and regulated provider of medical cannabis. The Company has a 60,000 sq. ft facility, producing 3,600 kg of cannabis annually. The Company received approval in January 2019 from Health Canada to build a 450,000 sq. ft. facility in the Niagara Region of Ontario. Additionally, CannTrust has an 81-acre outdoor growing facility located in British Columbia with an expected capacity of 75,000 kg annually. The license to grow at this facility is currently pending approval from Health Canada.
- Market Cap: $1.1 Billion
- YTD Return: 12.2%
- 90 Day Average Trading Volume: 2,140,000
- Net Profit Margin: 76%
SLANG Worldwide Inc. (CSE:SLNG) – $2.05
Cannabis
SLANG is a cannabis-focused consumer packaged goods company with material operations throughout the U.S., Canada, Jamaica, and Puerto Rico. SLANG brands have collectively accumulated +US$250M in retail sales to date. SLANG licenses its wholly-owned IP to third parties in exchange for royalties, rather than cultivating and retailing its own products. SLANG also provides services to its licensees for corporate development, sales & marketing, finance, legal, and human resources. On May 23, SLANG Worldwide launched its latest vaporizer product, the Firefly 2+, which will be available for purchase online and in retail stores throughout the world starting May 28.
- Market Cap: $438 Million
- YTD Return: 36.6%
- 90 Day Average Trading Volume: 730,000
- Net Profit Margin: 67.6%
Trulieve Cannabis Corp. (CSE:TRUL) – $17.39
Cannabis
Trulieve is the first medical cannabis company in the state of Florida. The Company cultivates and produces products in-house and distributes its products to Trulieve-branded stores in Florida, as well as directly to patients via home delivery. On May 28, Trulieve announced its financial results for the first quarter of 2019 ended March 31, 2019. These results featured revenue of $44.5M, an increase from $35.9M in the previous quarter.
- Market Cap: $1.9 Billion
- YTD Return: 49.3%
- 90 Day Average Trading Volume: 300,000
- Net Profit Margin: 29.8%
Wildflower Brands Inc. (CSE:SUN) – $0.68
Cannabis
Wildflower Brands is a cannabis company focused on developing and designing branded products in the cannabis sector. Wildflower Brands markets its CBD+ products to retailers in the health and wellness space throughout the U.S. Further, Wildflower Brands works in regulated cannabis markets in the U.S. in accordance with such regulations, marketing its THC and CBD+ products. Some of SUN’s CBD+ products include CBD-based topicals, soaps, capsules, and vaporizers.
- Market Cap: $46.1 Million
- YTD Return: 8.1%
- 90 Day Average Trading Volume: 120,000
- Net Profit Margin: 12.2%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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