The Canadian cannabis stocks on our list have received more than $800 million in total financing this year
SmallCapPower | May 7, 2018: With the legalization of recreational marijuana in Canada expected this summer, cannabis producers are extensively improving their production capability to satisfy the expected growth in demand. The Canadian cannabis stocks on our list today have received the largest financings this year in order to accomplish their expansion initiatives. Canopy Growth Corp, Hydropothecary Corp and MedReleaf Corp have outperformed the average YTD return of the Top 20 largest Canada-listed cannabis companies, which equated to -8.9%.
Aurora Cannabis Inc. (TSX:ACB) – $8.02
Aurora Cannabis is a licensed producer and seller of medical marijuana and cannabis oil under the Access to Cannabis for Medical Purposes Regulations (ACMPR). Aurora sells its products over the phone, online or through its mobile app and offers a delivery service to its customers. Currently, the Company is engaged in the construction of its new 800,000 sq. ft. production facility in Alberta called Aurora Sky. The proceeds from the completed financing deal in March 2018, were used towards the acquisition of CanniMed Therapeutics Inc., and the expansion of the 1M sq. ft. production facility Aurora Nordic in Denmark.
- Market Cap: $4,499.3 Million
- Date Announced: January 5, 2018
- Deal Size: $230 Million in convertible debt at $13.05 conversion price
- YTD Return: -16.5%
- Return since the deal announcement: -44.7%
Canopy Growth Corp. (TSX:WEED) – $29.96
As Canada’s largest public cannabis company, Canopy Growth operates two producing facilities totaling 540,000 sq. ft. and has 5.7M sq. ft. in development. The Company has sold 6,200 kg of cannabis products last year and currently has 69,000 patients across Canada. Additionally, WEED recently acquired the necessary agreements to export medicinal cannabis to Australia, Brazil and Germany. The Company is using the proceeds from the completed financing in February 2018, over an 18-month period for general working capital purposes.
- Market Cap: $5,964.2 Million
- Date Announced: January 17, 2018
- Price of the deal: $34.60
- Deal Size: $200 Million
- YTD Return: 0.7%
- Return since the deal announcement: -28.8%
Cronos Group Inc. (TSXV:CRON) – $7.62
Cronos Group owns and operates two licensed producers of marijuana in Canada: Peace Naturals (medical) and In The Zone (recreational). The Company also actively seeks investment opportunities in companies that are licensed under the ACMPR, or that are actively seeking a license. In addition, Cronos plans to ramp up production at its Peace Naturals facility from the existing 5,000 kg to 40,000 kg by 2019. Furthermore, the Company formed a partnership with Israeli entity Gan Shmuel to set up a low-cost production facility in Israel. In March 2018, the Company completed a financing deal for $100M in addition to their completed deal in January 2018, for $46M.
- Market Cap: $1,409.6 Million
- Date Announced: March 21, 2018
- Price of the deal: $8.75
- Deal Size: $100 Million
- YTD Return: -21.8%
- Return since the deal announcement: -21.5%
Hydropothecary Corp. (TSXV:THCX) – $4.32
Hydropothecary is a licensed producer and distributor of medical marijuana under the ACMPR, with an operational 50,000 sq. ft., Hydropothecary aims to expand up to 250,000 sq. ft. by Q2/2018. Hydropothecary closed a $69M offering in November 2017, to fund its expansion plans. In January 2018, the Company completed an additional financing deal for $149.5M used for additional production equipment for their Building 9 expansion and further expansion plans.
- Market Cap: $777.1 Million
- Date Announced: January 8, 2017
- Price of the deal: $4.00
- Deal Size: $149.5 Million
- YTD Return: 5.6%
- Return since the deal announcement: -13.6%
MedReleaf Corp. (TSX:LEAF) – $22.25
MedReleaf is a licensed producer of medical marijuana under the ACMPR. MedReleaf currently produces 7,000 kg/year out of a 55,000 sq. ft. facility in Markham. The Company started to produce 5,600 kg/year out of a 210,000 sq. ft. facility in Bradford in October. LEAF plans to expand its Bradford facility to reach 28,000 KG/year from it by August 2018. The Company has also partnered with Shoppers Drug Mart to sell medical marijuana. LEAF used a portion of net proceeds from the completed financing in January for the purchase of 1M sq. ft. of greenhouse space, adding 105,000kg of cannabis to their full capacity output.
- Market Cap: $2,199.9 Million
- Date Announced: January 9, 2018
- Price of the deal: $26.50
- Deal Size: $132.5 Million
- YTD Return: 4.8%
- Return since the deal announcement: -25.7%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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