The Canadian cannabis stocks on our list could be tempting takeover targets as the major players make investments in South American cannabis cultivators
SmallCapPower | September 11, 2018: Aurora Cannabis Inc. (TSX:ACB) Monday announced an agreement to acquire ICC Labs Inc. (TSXV:ICC), a Uruguay/Colombia cannabis producer, in an all-stock deal valued at $290M. The news mirrors similar acquisitions by major cannabis companies seeking cultivation assets in the favourable equatorial climates of South America. Today, we have identified some Canadian cannabis stocks with cultivation facilities (in development or operating) located in Latin America that represent prime takeover targets for the major players within the cannabis industry.
Khiron Life Sciences Corp. (TSXV:KHRN) – $1.07
Khiron Life Sciences is a Canadian medical cannabis company with operations in Colombia. The Company is focused on scientific and medical-based research applications for cannabis. Khiron estimates a potential market of 6M for patients in Colombia, with the intention of targeting an estimated 68M patients throughout Latin America upon future expansion. In 2017, Khiron was grated cultivation and production licenses in Colombia for both low and high THC strains. The Company intends to open its first clinics in Q4/2018.
- Market Cap: $52.0 Million
- 1 Month Total Return: 4.9%
- Avg Volume last 30 days: 350,050
- Avg Volume last 12 months: 110,931
Cronos Group Inc. (TSX:CRON) – $15.80
Cronos Group owns and operates two licensed producers of medical marijuana in Canada: Peace Naturals (medical) and In the Zone (recreational). The domestic capacity is expected to reach over 40,000KG prior to 2019. Internationally, the Company has formed a 50/50 joint venture with Agroidea SAS (AGI), Colombia’s leading agricultural service provider. The partnership permit Cronos to develop, cultivate, and manufacture cannabis at a custom-built, 207-acre facility, in Cundinamarca, Colombia.
- Market Cap: $2,795.1 Million
- 1 Month Total Return: 113.2%
- Avg Volume last 30 days: 3,312,843
- Avg Volume last 12 months: 1,250,896
MYM Nutraceuticals Inc. (CSE:MYM) – $1.28
MYM Nutraceuticals is a Canada-based company engaged in cannabis cultivation with production facilities in Canada, Australia, and Colombia. In Colombia, the Company owns a 49% stake in Colombia ORGANICA, which focuses on cultivating cannabis in the high altitude, equatorial regions of Antioquia. On August 8, 2018, the Company announced an agreement with Dutch Passion Seed Company to produce and distribute Dutch Passion branded cannabis products in Colombia.
- Market Cap: $145.6 Million
- 1 Month Total Return: 17.4%
- Avg Volume last 30 days: 547,729
- Avg Volume last 12 months: 1,367,621
Scythian Biosciences Corp. (CSE:SCYB) – $3.08
Scythian Biosciences is a research and development company focused on treating traumatic brain injury using cannabinoid-based drug therapy. Recently, the Company has initiated international expansion by forming strategic partnerships with cannabis cultivators in North America, South America, and the Caribbean. On August 8, 2018, Scythian announced that it had acquired 90% of Colcanna SAS, a Colombian-based company with a license to cultivate and import THC and CBD within Colombia.
- Market Cap: $113.1 Million
- 1 Month Total Return: -11.7%
- Avg Volume last 30 days: 181,542
- Avg Volume last 12 months: 207,576
PharmaCielo Ltd. (Not Yet Listed) (TSXV:AAJ.P)
PharmaCielo is a privately-held cannabis company focused on producing cannabis oil extracts and related cannabis products. Although the Company’s headquarters are in Canada, cultivation facilities are focused in Colombia due to favourable climate conditions. PharmaCielo gained its cannabis cultivation license in October 2017 and is currently commencing cultivation and processing of cannabis oil products. On August 13, 2018, the Company announced the closing of its private placement offering with gross proceeds being estimated at $39.2M. The Company is expected to go public via a Qualifying Transaction with capital pool company AAJ Capital 1 Corp. (TSXV:AAJ.P).
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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