The Canadian cannabis stocks we’ve unearthed appear to be early winners in the cannabis retail landscape in Canada
SmallCapPower | October 24, 2019: Some of the struggles involving Canadian cannabis stocks during the past year can be attributed to a poor retail rollout, especially in Ontario and Quebec. Those companies that were ‘lucky’ enough to receive a cannabis retail license seem to have a license to print money. For example, Alcanna Inc revealed in its Q2 2019 financial results that its Nova Cannabis location in downtown Toronto is averaging $450,000 in sales per week. Today we have uncovered four Canadian cannabis stocks that have been enjoying an early cannabis retail advantage.
*Share prices at October 21, 2019, data obtained from S&P Capital IQ
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Fire & Flower Holdings Corp. (TSX:FAF) – $1.18
Cannabis
Fire and Flower currently operates 17 cannabis retail locations (9 in Alberta, 6 in Saskatchewan, and 2 in Ontario). The Company has licenses for an additional 6 retail locations in Alberta, which are fully built but are awaiting provincial licenses, two of which are currently operating as cannabis accessories stores. On July 23, 2019, Fire and Flower announced that it had received a license for a retail store in the Yukon, bring the total branded retail locations the Company owns to 24. On July 24, 2019, FAF announced that it had entered into a subscription agreement with Alimentation Couche-Tard Inc. The sub agreement allows for Couche-Tard to provide Fire & Flower with an investment in aggregate of up to $380M. The initial tranche of the agreement is a convertible debenture for a 9.9% ownership that converts at $1.07 per common share when Fire & Flower hits a milestone of 45 licensed stores operational by December 31, 2020.
- Market Cap: $145M
- 7 Day Return: 1%
- 30 Day Return: -15%
Alcanna Inc. (TSX:CLIQ) – $4.45
Cannabis
Alcanna owns and operates 174 retail liquor locations in B.C., Alberta, and Alaska, processing over 18M of alcohol retail transactions per year. Alcanna’s cannabis stores operate under the “Nova Cannabis” brand. The Company’s retail location on Queen St in Toronto is considered a quality location in the city.
- Market Cap: $165M
- 7 Day Return: 1%
- 30 Day Return: -16%
Inner Spirit Holdings Ltd. (CSE:ISH) – $0.14
Cannabis
Inner Spirit Holdings went public on the CSE on July 30, 2018. Inner Spirit is a Canadian franchise business that intends to specialize on the retail side of the recreational cannabis market. The Company is establishing a chain of dispensaries throughout Canada under its Spiritleaf brand, and it already has over a 100 franchise locations granted in Western Canada. In Alberta and British Colombia, Inner Spirit holds the maximum number of retail licenses a business can obtain. In Saskatchewan, the Company has been selected as the cannabis retailer for Moose Jaw, the fourth-largest city in the province. Additionally, it plans to use Shopify as its e-commerce retail outlet.
- Market Cap: $29M
- 7 Day Return: 1%
- 30 Day Return: -15%
Westleaf Inc. (TSXV:WL) – $0.36
Cannabis
Westleaf is a Canadian cannabis company focused on cannabis brands, extraction and production of cannabis-derivative products, wholly-owned retail, as well as cannabis cultivation. The Company’s extraction and processing facility, The Plant, will produce high quality and consistent cannabis derivatives and consumables, both for Westleaf’s in-house brands as well as white-label products. Westleaf’s retail concept, Prairie Records, leverages the instinctual tie between recreational cannabis and music with stores operating or in development across Western Canada. The Company’s Thunderchild cultivation facility is scheduled for completion at the end of this year.
- Market Cap: $51M
- 7 Day Return: 18%
- 30 Day Return: 0%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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