The Canadian cannabis stocks on our list have some of the biggest short positions in July
SmallCapPower | July 24, 2019: With cannabis regulations loosening around the world, the industry has been characterized by growth and bullish speculations. Despite the growing acceptance towards cannabis, many investors do not believe all the hype and predict that the industry is overvalued. On July 19, the Investment Industry Regulatory Organization of Canada (IIROC) released its Consolidated Short Position Report, depicting the most shorted cannabis stocks from the period of July 8, 2019 to July 19, 2019. Today, using this report, we have weeded out four of the most-shorted Canadian cannabis stocks in that given period. For reference, a high short ratio is above 10 and one between 1 and 4 shows a positive sentiment and little interest from short sellers (Power Cycle Trading, 2019). To add some perspective, oil and gas companies are the most shorted at this time. The average ratio for the Top 10 shorted stocks in the oil and gas industry is 15.0x.
*Short interest ratio is calculated by dividing shares held short by the 30-Day average trading volume
**Share prices as at close July 22, 2019, data obtained from S&P Capital IQ
Aurora Cannabis Inc. (TSX:ACB) – $8.80
Aurora Cannabis is a vertically-integrated and horizontally-diversified cannabis company based in Edmonton, Alberta, which currently has a funded capacity that exceeds 625,000 kg per year. The Company has sales operations in 25 countries across five continents. As of now, the Company has 18 strategic acquisitions, 15 global production facilities with 3 EU GMP certified, 40 clinical studies running or completed and over 77,000 medical patients served. On July 18, 2019, the Company announced that it was selected by the Italian government to be its public tender to supply medical cannabis in Italy. With the contract, Aurora will supply a minimum of 400kg of medical cannabis over the two-year contract. On July 15, 2019, Aurora announced that it received Health Canada licenses for outdoor cultivation at two Canadian sites: in Quebec and British Columbia. Visit Aurora’s corporate website for more information.
- Market Cap: $8,948.3 Million
- YTD Return: +29.5%
- 30 Day Average Trading Volume (1,000): 3,203
- Shares Held Short: 36,594,575
- Short Interest Ratio: 11.4x
The Green Organic Dutchman Holdings Ltd. (TSX:TGOD) – $3.11
The Green Organic Dutchman is a global organic cannabis company that has operations in the medical market in Canada, Europe, the Caribbean and Latin America, as well as the Canadian recreational market. The Company has 1,476,000 sq.ft of hybrid greenhouses and processing facilities under construction in Canada and more than 167,000 sq.ft of planned space across Europe and Jamaica. TGOD has already received the ACMPR cultivation and sales license but its two facilities are currently under construction. These include: 1) its Hamilton facility, which is nearing completion of its 166,000 sq.ft facility that is expected to have a yearly capacity of 17,500 kg; and 2) its Valleyfield facility that is under construction and is expected to be 1,310,000 sq.ft with a predicted capacity of 185,000 kg per year. On June 12, 2019, TGOD signed a multi-year agreement with Neptune, which will include exclusive rights on processing and manufacturing of certified organic products. With this agreement, TGOD will allocate more than 230,000 kg of cannabis and hemp biomass for Neptune to process. Visit TGOD’s corporate website for more information.
- Market Cap: $856.6 Million
- YTD Return: +26.4%
- 30 Day Average Trading Volume (1,000): 870
- Shares Held Short: 9,443,661
- Short Interest Ratio: 10.9x
Golden Leaf Holdings Ltd. (CSE:GLH) – $0.06
Golden Leaf Holdings is a Canada-based cannabis company that practices cultivation, production and retail with operations in Oregon, Nevada and Canada. The Company distributes its products through its branded Chalice Farms retail dispensaries and through third-party dispensaries. The Company produces and distributes various types of products, such as cannabis flower and cannabis oils. On July 15, 2019, the Company announced that its wholly-owned subsidiary, Medical Marijuana Group Corporation, received its Standard Processing and Sale for Medical Purposes License from Health Canada. Visit Golden Leaf Holdings corporate website for more information.
- Market Cap: $35.3 Million
- YTD Return: -51.9%
- 30 Day Average Trading Volume (1,000): 1,286
- Shares Held Short: 6,901,190
- Short Interest Ratio: 5.4x
Canopy Growth Corporation (TSX:WEED) – $45.69
Canopy Growth has the largest licensed production platform in Canada, with over 600,000 sq.ft of production space. Currently, Canopy Growth has 90 patents and over 240 patent applications to date. Patents include cannabis-based beverage production, device and delivery technologies and cannabis plant genetics among others. Canopy Growth has 1,000 patients involved in human health clinical trials, 60 human health clinical trials and four animal health clinical trials. On June 26, 2019, the Company completed a transaction to acquire Saskatoon-based bio-product extractor KeyLeaf Sciences. Visit Canopy Growth’s corporate website for more information.
- Market Cap: $15,799.0 Million
- YTD Return: +25.8%
- 30 Day Average Trading Volume (1,000): 1,851
- Shares Held Short: 8,947,922
- Short Interest Ratio: 4.8x
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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