4 Canadian Cannabis Stocks with Potential HMJR ETF Upside

The Canadian cannabis stocks on our list are notable exclusions from the HMMJ Index but offer upside with their inclusion in the Horizons Emerging Growers (HMJR) Index

SmallCapPower | October 25, 2018: Horizons offers different Exchange Traded Funds (ETFs) to consumers sourced from a variety of industries. Over the past year Horizon’s notable ETFs have been sourced from the cannabis industry with the Horizons Marijuana Life Sciences Index (TSX:HMMJ) and the lesser known Horizons Emerging Growers Index (TSX:HMJR). While both ETFs offer exposure to North American cannabis companies, HMJR focuses on small-cap companies and omit major players such as Canopy Growth Corp (TSX:WEED). Today, we have identified four key Canadian cannabis stocks included in HMJR but are excluded from HMMJ. These companies should benefit from the inclusion in HMJR and can offer high returns for investors with some tolerance for greater risk.

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Sproutly Canada Inc. (CSE:SPR) – $0.70

Sproutly Canada is focused on becoming the leading supplier of cannabis beverages and edibles to the international recreational market. The Company has a Toronto based, 16,600 sq. ft. indoor production facility capable of producing 1,400 kg of cannabis per year. Sproutly has a partnership with Infusion Biosciences for exclusive rights to Infusion’s APP Technology, which can produce water-soluble cannabis beverages. The Company’s process is currently patent pending, with Sproutly having exclusive rights for the technology in Canada, U.K., EU, Israel, Australia and Jamaica.

  • Market Cap: $121.5 Million
  • 1-Month Total Return: 4.2%
  • Average Daily Volume (Last 3 Months): 220,000
  • HMJR Weighting: 1.5%

Valens Groworks Corp. (CSE:VGW) – $1.85

Valens Groworks is a Vancouver-based cannabis oil producer with three subsidiaries in the Okanagan Valley region: Valens Agritech Ltd, Valens Farm and Supra THC Services Inc. Valens Agritech operates a 25,000 sq. ft. cannabis extraction and cultivation facility and holds an EU GMP certification for global exporting. Valens Farms, which is currently under construction, will operate a 400,000 sq. ft. cannabis cultivation facility that grows cannabis through monocropping methodology to increase annual crop turnover. Supra THC Services operates a cannabis research laboratory that will be responsible for testing and analyzing the quality of Valens’ cannabis products. Supra THC is the first cannabis laboratory in the world to receive the Thermo Fisher “Center of Excellence in Plant Based Medicines” recognition.

  • Market Cap: $175.4 Million
  • 1-Month Total Return: -4.0%
  • Average Daily Volume: 550,000
  • HMJR Weighting: 2.5%

Ascent Industries Corp. (CSE:ASNT) – $0.56

Ascent Industries operates cannabis production and distribution facilities in Canada, Oregon, and Nevada. The Company currently has three production facilities in British Columbia: Agrima Botanicals, Agrima Labs, and Agrima Meadows. The Company’ flagship indoor cultivation facility reached full capacity in August with average production of 1.5kg per 1000-watt light. The Company has formed distribution partnerships with Aurora Cannabis, the Ontario Cannabis Retail Corporation and the British Columbia Liquor Distribution Board; research partnerships with Simon Fraser University to identify therapeutic benefits for cannabinoids; and supply agreements with Australia’s ANTG for up to 10,000 kg of medicinal cannabis per year.

  • Market Cap: $176.2 Million
  • 1-Month Total Return: -22.5%
  • Average Daily Volume (Last 3 Months): 1,590,000
  • HMJR Weighting: 2.8%

Planet 13 Holdings Inc. (CSE:PLTH) – $2.38

Planet 13 Holdings operates cannabis cultivation facilities and dispensaries across Nevada. The Company has a total cultivation capacity of 2,100 lbs/year from its two cultivation facilities in Las Vegas and Beatty, Nevada. Planet 13 is set to launch its largest dispensary, the Planet 13 Superstore, in November located adjacent to the Las Vegas strip. The dispensary is projected to serve over 2,000 customers daily and is expected to cover more than 40,000 square feet.

  • Market Cap: $143.9 Million
  • 1-Month Total Return: -6.7%
  • Average Daily Volume (Last 3 Months): 340,000
  • HMJR Weighting: 2.8%

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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