Quarterly financial results for Canadian cannabis stocks have been rolling out this week and we’ve identified the big winners within the cannabis industry
SmallCapPower | November 16, 2018: Over the past week many Canadian cannabis companies have reported their latest quarterly financial results. Many investors have been concerned with high valuations in the cannabis industry therefore deeming investment as too risky. They have placed an increased emphasis on seeing strong revenue gains on an annual basis for stocks to grow into their lofty valuations. The three Canadian cannabis stocks we’ve weeded out saw average revenue growth of 198% y/y, while simultaneously seeing an average stock price decline of 36.6% in the past month. These stocks could see a rebound in share price as a result of their strong financial results. At the very least, investors should place these stocks on their watch list as it will be interesting to see if the aggressive growth can be sustained in their next quarterly earnings, which will capture sales made post recreational legalization. Note: metrics reflect closing prices as at November 14, 2018.
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CannTrust Holdings Inc. (TSX:TRST) – $7.22
Cannabis
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. On October 28, 2018, 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 C$6M for 19.8% ownership of Cannatrek.
- Market Cap: $760.8 Million
- Revenue (Last Quarter): $12.6 Million
- Change in Revenue Yr/Yr: 106.0%
- 1-Month Total Return: -48.1%
Aurora Cannabis Inc. (TSX:ACB) – $8.16
Cannabis
Aurora Cannabis is a licensed producer and distributor of medical cannabis. ACB expects to have just under 1,000,000 sq. ft. of licensed production space and plans to produce at least 270,000 kilograms of cannabis annually. The Company also has 20% ownership interest in Liquor Stores N.A., the dominant alcohol retail chain in Western Canada. It intends to convert several existing outlets, as well as develop new stores, for the sale of cannabis to the recreational market. Additionally, the Company has signed a supplier agreement with the Province of Québec to supply cannabis for the province’s adult consumer market. Aurora has also embarked on an aggressive international expansion strategy that aims to have operations or sales in foreign markets such as Germany, Denmark, Italy and Australia. On October 16, 2018, the Company announced the release of its high-potency, vape-ready CBD oil product line, Aurora Cloud. The move marked Aurora as the first licensed producer (LP) to launch a vape-read, high potency CBD oil cartridges.
- Market Cap: $7,875.3 Million
- Revenue (Last Quarter): $29.7 Million
- Change in Revenue Yr/Yr: 260%
- 1-Month Total Return: -40.5%
The Supreme Cannabis Company Inc. (TSXV:FIRE) – $1.64
Cannabis
Supreme Cannabis is a Canada-based licensed producer of medical marijuana. The Company’s primary asset is 7ACRES, which currently operates a 40,000 sq. ft. facility that produces 13,330 kg per year. The Company is also developing a 342,000 sq. ft. facility at 7ACRES that anticipates 50,000 kg of annual production. On September 26, 2018, the Company announced a supply agreement with Tilray Inc. (NASDAQ:TLRY) to provide dried cannabis in a deal estimated to be worth $12 million.
- Market Cap: $458.3 Million
- Revenue (Last Quarter): $5.14 Million
- Change in Revenue Yr/Yr: 229%
- 1-Month Total Return: -21.2%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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