In their latest reported quarterly financial results, the Canadian cannabis stocks on our list have posted strong EBITDA and net income metrics that have distinguished themselves within the industry
SmallCapPower | December 12, 2018: Following the legalization of recreational cannabis in Canada and the recent pullback, all eyes are on profitability and potential within the cannabis industry. As such, we have identified three Canadian cannabis stocks that have distinguished themselves by posting positive EBITDA and net income in their last quarterly statements. These companies have significantly outperformed their industry peers which, on average, have reported EBITDA losses of $6.53M and net income losses of $5M.
Organigram Holdings Inc. (TSXV:OGI) – $4.74
Organigram is a Canada-based marijuana producer operating in New Brunswick. The Company currently produces 22,000 kg/year out of its 134,000 sq. ft. facility. OGI plans to expand this facility by increasing production to 65,500 kg by April 2019, and 113,000 kg by April 2020. The Company has signed MoUs with New Brunswick for the supply of 5M grams in 2018, and Prince Edward Island for the supply $8M-$12M worth of cannabis to its recreational market. In November, the Company announced a strategic partnership with the Government of Canada, Genome Atlantic, and the New Brunswick Innovation Foundation to create a research project focused on cannabis innovation at the University of Moncton. The research will specialize in genetics and will identify new growing techniques that will improve productivity, lower costs, and provide healthier and more resistant plants.
- Market Cap: $614.1M
- EBITDA (Last Annual): $8.57M
- Net Income (Last Annual): $2.82M
- 1 – Month Total Return: -21.1%
CannTrust Holdings Inc. (TSX:TRST) – $7.43
CannTrust is a Canada-based licensed producer of medical cannabis. The Company’s original 60,000 square foot production facility, located in Vaughan, Ontario, uses hydroponic technology to produce at 3,600 kg annually. CannTrust has also set aside a 46-acre property in Niagara, where it intends to build a 450,000 sq. ft. facility to increase growing capacity with an anticipated completion date in 2019. In October, the Company announced a strategic partnership with Cannatrek Ltd, an Australian licensed cannabis producer, to expand the Company’s global reach to the Australian and Asian markets. CannaTrust will invest $6M for 19.8% ownership of Cannatrek. On November 14, 2018, the Company announced record revenue for Q3/2018 as sales grew 105% yr/yr.
- Market Cap: $783.0M
- EBITDA (Last Quarter): $2.97M
- Net Income (Last Quarter): $0.42M
- 1 – Month Total Return: -14.6%
Cannex Capital Holdings Inc. (CSE:CNNX) – $0.87
Cannex Group Holdings is a Canada-based company with cannabis operations in Washington and California. Cannex is focused on premium indoor cultivation, extraction, manufacturing and branding of edible and derivative products, as well as retail operations. The Company’s subsidiary, BrightLeaf Development LLC, is the largest producer/processor in Washington State. Cannex plans to produce from two indoor cultivating facilities with a combined 30,000 sq. ft. and 19,000 kg/year capacity, equating to one of the highest yields in the industry at 633 grams/sq. ft. On November 26, 2018, Cannex announced a letter of agreement to combine with 4Front Holdings, a leading retail and brand development company in the U.S. cannabis sector. The combined Company will continue to trade on the CSE under the CNNX ticker symbol.
- Market Cap: $159.8M
- EBITDA (Last Quarter): $1.57M
- Net Income (Last Quarter): $3.16M
- 1 – Month Total Return: 3.6%
Ubika Research/SmallCapPower has received compensation from 4Front Ventures Corp. to provide analyst research coverage. For full disclosure please visit here >>
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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