The Canadian cannabis stocks we’ve identified have experienced the largest increases in its short interest ratio
SmallCapPower | September 11, 2019: With cannabis regulations loosening around the world, the industry has been characterized by growth and bullish speculation. Despite the growing acceptance towards cannabis, many investors do not believe all the hype and predict that the industry is overvalued. On September 9, the Investment Industry Regulatory Organization of Canada (IIROC) released its Consolidated Short Position Report, depicting the most shorted cannabis stocks from the period of August 21, 2019, to September 9, 2019. Today, using this report, we have weeded out four Canadian cannabis stocks with short positions that have increased the most over that time period from the previous report. For reference, shares held short represents the outstanding shares that have been sold short, whereas short interest ratio takes the shares held short and divides it by the 30-day average daily volume of shares traded.
*Share prices as at September 9, 2019, data obtained from S&P Capital IQ
Golden Leaf Holdings Ltd. (CSE:GLH) – $0.04
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 August 26, Golden Leaf Holdings Ltd announced its financial results for Q2/19. These results featured revenue of US$4.3M, an increase of 17% from the previous quarter, and an Adjusted EBITDA loss of US$1.5M compared to an EBITDA loss of US$3.5M in the previous quarter.
- Market Cap: $34.8M
- 30-Day Return: -27.3%
- 90-Day Return: -50.0%
- Average 30-Day Trading Volume: 2,268,000
- Shares Held Short: 27,656,520
- Short Interest Ratio: 12.2x
- Net Change in Shares Held Short: +13,239,055
48North Cannabis Corp. (TSXV:NRTH) – $0.78
48North Cannabis is a vertically-integrated cannabis company focused on the health and wellness market through cultivation and extraction, as well as the creation of innovative, authentic brands for next-generation cannabis products. The Company operates two indoor-licensed cannabis production sites in Ontario with over 86,000 sq. ft of production capacity. In addition, 48North plans to operate Good Farm, a 100-acre organic farm, providing 48North with organic, sun-grown cannabis. On May 18, 2019, 48North announced that it was approved to operate Good Farm, positioning the Company to produce over 40,000 kg of outdoor-grown cannabis this year.
- Market Cap: $133.2M
- 30-Day Return: -9.2%
- 90-Day Return: -12.2%
- Average 30-Day Trading Volume: 489,000
- Shares Held Short: 2,168,488
- Short Interest Ratio: 4.4x
- Net Change in Shares Held Short: +2,110,361
Emerald Health Therapeutics, Inc. (TSXV:EMH) -$1.84
Emerald Health Therapeutics is a licensed producer of cannabis in Canada, focused on developing proprietary, value-added cannabis products for medical and adult-use customers. The Company’s 50% joint venture in British Columbia, Pure Sunfarms, is licensed and fully planted in the first of its two 1.1 million sq. ft. greenhouses, with each greenhouse having an estimated annual capacity of over 75,000 kg. Furthermore, Emerald’s Verdélite operation is completing the construction of its 88,000 sq.ft. indoor cultivation facility and is scaling up production. The Company has secured over 500 acres of hemp harvest in 2018 and has contracted for ~1000 acres in 2019 to 2022.
- Market Cap: $278.6M
- 30-Day Return: -1.6%
- 90-Day Return: -39.9%
- Average 30-Day Trading Volume: 456,000
- Shares Held Short: 3,462,333
- Short Interest Ratio: 7.6x
- Net Change in Shares Held Short: +887,093
Cronos Group Inc. (TSX:CRON) -$ 14.89
Cronos is a globally-diversified and vertically-integrated cannabis company that currently has operations in five continents. The Company has two wholly-owned Canadian licensed producers: 1) Peace Naturals Project Inc., a global health and wellness platform; and 2) Original BC Ltd., a recreational adult-use Canadian licensed producer that is located in Okanagan Valley, BC. Cronos’ business strategy is to focus on building an international iconic brand portfolio in addition to developing its intellectual property. On August 8, 2019, the Company released its Q2/19 financial results, which showed net revenue of $10.2M, an increase of 58% QoQ from $6.5M in Q1/19. This was driven mainly by increased sales of CBD oil.
- Market Cap: $5.0B
- 30-Day Return: -12.9%
- 90-Day Return: -32.2%
- Average 30-Day Trading Volume: 784,000
- Shares Held Short: 3,717,259
- Short Interest Ratio: 4.7x
- Net Change in Shares Held Short: +81,837
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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