The Canadian cannabis stocks we’ve unearthed have a significant number of their shares in institutional hands
SmallCapPower | February 25, 2019: Ownership structure of a company can be broken down into four categories: (1) institutional ownership, (2) intercorporate investments, (3) insiders, and (4) public/retail investors. Mature industries typically have high institutional ownership. For example, the Big 5 Canadian banks: RBC, BMO, Scotia, TD, and CIBC, have 45.4%, 47.6%, 53.3%, 52.9%, and 50.9% institutional ownership, respectively. Industries in their infancy, such as cannabis, often have higher retail ownership, as institutional investors tend to favour more established companies. Today we have picked out four Canadian cannabis stocks that have a significant amount of institutional ownership.
*Share price data as at close February 21, 2019, data obtained from S&P Capital IQ
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Cronos Group Inc. (TSX:CRON) -$29.64
Cannabis
Cronos Group operates two wholly-owned Canadian licensed producers and has distribution and production across five continents. The Company is focused on expanding its global footprint through building an international iconic brand portfolio and developing disruptive intellectual property. On January 23, the Company announced it has received a $65M credit facility co-led CIBC and BMO. On February 21, Cronos Group announced its shareholders approved the $2.4B strategic investment from Altria Group (NYSE:MO), the cigarette maker behind Marlboro.
- Market Cap: $5.1 Billion
- 1-Month Returns: +46.7%
- YTD Returns: +92.5%
- Institutional Ownership: 12.0%
CannTrust Holdings Inc. (TSX:TRST) – $12.32
Cannabis
CannTrust Holdings is a distributor and producer of pharmaceutical medical cannabis and its related products. With the help of healthcare practitioners, the Company sells dried cannabis and oil extracts to clients. Incorporated in 2015, the Company has a 60,000 sq. ft. facility, producing 3,600 kg of cannabis annually. The Company intends to expand in 2019, planning to build a 450,000 sq. ft. facility in the Niagara Region of Ontario. On January 8, CannTrust announced its application to list on the NYSE. On February 20, the Company announced that it has satisfied all the regulatory requirements to list and will begin the trading on Monday, February 25.
- Market Cap: $1.3 Billion
- 1-Month Returns: +35.1%
- YTD Returns: +74.0%
- Institutional Ownership: 10.7%
The Green Organic Dutchman Holdings Ltd. (TSX:TGOD) – $3.71
Cannabis
Green Organic Dutchman Holdings is a Canadian cannabis producer with operations in Quebec and Ontario. The Company strives to be the lowest cost producer in Canada by accessing the lowest power rates in its provinces of operation. The Company’s combined production capacity totaling 970,000 sq. ft. is expected to be 116,000 kg of cannabis flower. On February 8, TGOD announced it had secured a cannabis supply agreement with the Ontario Cannabis Retail Corporation.
- Market Cap: $988.1 Million
- 1-Month Returns: +24.9%
- YTD Returns: +39.0%
- Institutional Ownership: 7.6%
Organigram Holdings Inc. (TSXV:OGI) – $7.92
Cannabis
Organigram Holdings is a Canada-based company that produces and sells cannabis oil and dried cannabis through its subsidiaries. Since 2013 and with the help of healthcare providers, the Company is focused on delivering safe, effective, and quality products. OGI has increased its production capacity to 36,000k/year and is anticipating a production increase to 113,000kg/year by October 2019. As the leading company in the Atlantic provinces, OGI surpasses Canopy Growth Corp (TSX:WEED), Aphria Inc (TSX:APHA), and Aurora Cannabis (TSX:ACB),with a market share of 24% in Prince Edward Island and Nova Scotia. On January 29, the Company signed a multi-year extraction contract with Valens GroWorks Corp. (CSE:VGW), an extraction focused company.
- Market Cap: $1.0 Billion
- 1-Month Returns: +27.7%
- YTD Returns: +39.7%
- Institutional Ownership: 7.7%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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