The Canadian cannabis stocks we’ve weeded out have, or are planning to have, retail operations in Ontario and should benefit from recent changes in cannabis retail regulations in that province
SmallCapPower | July 5, 2019: In an effort to combat the illicit cannabis market and protect the youth population, the Ontario Government is granting the Alcohol and Gaming Commission of Ontario (ACGO) the authority to conduct a second lottery for 42 private cannabis retail store authorizations. Another eight licenses will go to First Nations communities on a first come, first serve basis. Today we have identified four Canadian cannabis stocks that operate retail locations, or have investments in cannabis retail companies, in Ontario that should benefit from this regulatory change.
*Share prices as at close Wednesday, July 3, 2019, data obtained from S&P Capital IQ
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Alcanna Inc. (TSX:CLIQ) – $5.85
Cannabis
Alcanna is one of the largest private sector retailers of alcohol in North America and the largest in Canada by number of stores, operating in more than 230 locations in Ontario, Alberta, British Columbia and Alaska. The Company also operates six cannabis retail stores under the “Nova Cannabis” brand, with five locations in the Province of Alberta and one in the Province of Ontario. On April 20, 2019, Alcanna opened a licensed Nova Cannabis store at 499 Queen Street West in Toronto. The store is owned by Heather Conlon, a winner of the Ontario government’s lottery process for cannabis retail licenses.
- Market Cap: $217.2M
- YTD Return: 36%
- 90 Day Average Trading Volume: 100,000
VIVO Cannabis Inc. (TSXV:VIVO) – $0.66
Cannabis
Formerly known as ABcann Global Corporation, VIVO Cannabis manufactures and distributes medical cannabis. The Company gained its production and sales license from Health Canada in April 2018. VIVO’s capacity estimates for 2019 include 1,500 kg of indoor cannabis with an additional 14,000 kg grown in greenhouse facilities. To increase supply and distribution, the Company entered into agreements relating to strategic equity investments in Canadian cannabis retailers National Access Cannabis Corp., Choom Holdings Inc, and Westleaf Cannabis Inc, all of which either have operations within Ontario or have plans on operating in Ontario. On June 20, VIVO said it has made a $1.25 million strategic investment in Friendly Stranger Holdings Corp., to facilitate Friendly Stranger’s aggressive cannabis retail expansion plans.
- Market Cap: $194.9M
- YTD Return: – 13.1%
- 90 Day Average Trading Volume: 650,000
Fire & Flower Holdings Corp. (TSXV:FAF) – $1.23
Cannabis
Fire & Flower Holdings operates 17 branded stores in Alberta, Saskatchewan, and Ontario, with a wholesale distribution division called Open Fields Distribution. FAF’s current retail focus is on Western Canada, where the regulatory framework is favourable to private investment in the space.
- Market Cap: $144.3M
- YTD Return: – 8.2%
- 90 Day Average Trading Volume: 190,000
Beleave Inc. (CSE:BE) – $0.08
Cannabis
Beleave is a Canada-based biotech company that focuses on the production of medicinal marijuana. The Company works toward the development of patented research and the research of cannabis-based therapies, such as smoke harm reduction products, portable & stationary vaporizers, and accessories. In November 2018, Beleave entered into a Strategic Alliance Agreement with the Rollins Group Inc to open and operate cannabis retail stores cross Canada. Beleave has the option to purchase up to 15% of all outstanding equity of Rollins Group. The Rollins Group is a cannabis retailer that looks to position itself as one of Canada’s top cannabis retail shopping chains by providing customers with a fun, warm, and inviting experience.
- Market Cap: $36.2M
- YTD Return: – 20%
- 90 Day Average Trading Volume: 1,180,000
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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