The Canadian cannabis stocks on our list today could get a boost after reporting financial results in the coming days
SmallCapPower | November 13, 2018: Today we have weeded out three Canadian cannabis stocks that are poised to report financial results in the coming weeks. These companies are all major players in the cannabis industry, and taken collectively, can steer the direction of the entire industry in the short term based on their financial results. Aurora Cannabis kicked off this round of earnings for cannabis companies by reporting before the market opened on November 12, 2018. The Company announced revenues of $29.7 million, a 260% increase from Q1 2018. Net income for Q1 2019 was $104.2 million, up from $3.6 million in Q1 2018, propped up by unrealized gains on derivatives and other securities. Aurora’s stock opened up at market open on November 12, 2018 but dipped into the red later on in the day as the selloff in the major indices spilled over to cannabis stocks. Strong financial results from these companies could provide a much needed catalyst to the industry that has seen a significant sell off from its October 15, 2018 peak. Note: metrics reflect closing prices as at November 9, 2018.
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Tilray Inc. (NASDAQ:TLRY) – US$108.99
Cannabis
Tilray is a company focused on medical cannabis research, cultivation, and distribution. The Company operates internationally through its subsidiaries in Australia, Canada, and Germany. On September 13, Tilray announced it had obtained regulatory approval to export flower-based products to Germany. This supplements the oil-based products the Company already exports to Germany. On November 8, 2018, Tilray announced a definitive agreement to partner with IntelGenx Corp to produce cannabis-infused VersaFilm products. VersaFilms is a drug delivery platform that improves the bioavailability of cannabis-based medical products. As pharmaceuticals may provide higher margins than traditional recreational cannabis products, this may pay off in the form of higher earnings in the years to come.
- Market Cap: US$10.2 Billion
- 1 Month Returns: -26.5%
- Expected Earnings Date: November 13, 2018
Canopy Growth Corp. (TSX:WEED) – $51.49
Cannabis
Canopy Growth Corporation is the largest cannabis company listed by market cap on the TSX and NYSE. To position itself in Canada’s recreational market, the Company has secured agreements with the Provinces of Quebec, Prince Edwards Island, New Brunswick, and Newfoundland & Labrador to supply their adult consumer market with high-quality cannabis. The Company has the largest licensed production platform in Canada, with over 600,000 sq. ft. of production space. To further solidify its leading position in the market, Canopy expects to have up to an additional 5,000,000 sq. ft. of production over the next 12 months. The Company has also acquired the necessary agreements to export medicinal cannabis to Australia, Brazil and Germany. Given its status as the largest publicly-traded cannabis company in the world, Canopy’s earnings could shape the direction of the industry in the short term.
- Market Cap: $17.4 Billion
- 1 Month Returns: -20.7%
- Expected Earnings Date: November 14, 2018
MedMen Enterprises Inc. (CSE:MMEN) – $6.60
Cannabis
MedMen Enterprises is a vertically-integrated cannabis company focused on the U.S. market. The Company has 18 facilities that manufactures and distribute their cannabis product in California, Nevada and New York. On June 6, the Company completed an acquisition of Treadwell Simpson Partnership and its affiliate. Through this transaction MedMen added Treadwell Nursery’s cultivation facility in Florida and has the license to open 25 additional medical dispensaries in Florida. On October 19, MedMen announced its intent to acquire PharmaCann for US$682 million, which drove the recent upswing in the stock. Once closed, the acquisition effectively positions MedMen in 12 states, including New York, Illinois, and Pennsylvania. The Company has been aggressively expanding, having recently agreed to acquire additional vertically-integrated operations in Arizona for US$33 million in cash and stock, as well as raising $120 million in equity financing (announced November 9, 2018).
- Market Cap: $2.9 Billion
- 1 Month Returns: -11.3%
- Expected Earnings Date: November 29, 2018
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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