The Canadian cannabis stocks we’ve dug up have accumulated large short positions as the cannabis speculative frenzy lifts the sector to new highs
SmallCapPower | September 20, 2018: The Canadian cannabis stocks we have weeded out today have accumulated large short positions following Constellation’s August 15, 2018 announcement of an additional $5B investment in Canopy Growth Corp. Additional developments have helped sustain the sector-wide rally, including reports of Coca Cola entering the cannabis-infused beverage market, as well as Tilray receiving an export license for medical cannabis from the U.S. government. This rally, however, has been accompanied by a spike in short interest. Shares Held Short represents the outstanding shares that have been sold short, whereas short interest ratio takes the shares held short and divides it by the average daily volume of shares traded.
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Canopy Growth Corporation (TSX:WEED) – $67.33
Cannabis
Canopy Growth is the largest cannabis company listed on a Canadian exchange, with a market cap exceeding $15B, serving both the recreational and medicinal markets. The Company engages in the production and distribution of several cannabis products including flowers, oils, concentrates, and hemps. Its portfolio of brands includes Tweed, DNA Genetics, Leafs by Snoop, and CraftGrow. Constellation’s $5B investment in Canopy, announced on August 15, 2018, sparked a sector-wide rally.
- Market Cap: $15.4 Billion
- 1 Month Returns: +37.4%
- Shares Held Short (as of Sept 4, 2018): 6.3M
- Short Interest Ratio (as of Sept 4, 2018): 0.68
Tilray Inc. (NASDAQ:TLRY) – US$154.98
Cannabis
Tilray is a Canada-based cannabis company listed on the NASDAQ serving the medicinal cannabis market. In addition to participating in the sector-wide rally that began on August 15, the Company announced recently that it had received approval from the U.S. Drug Enforcement Administration to export medicinal cannabis for clinical trials. This lifted the stock by more than 25% on the Sept 18, 2018, the day it was announced, and is currently up another 54% at the time this article was written on Wednesday. Tilray is the best performer of 2018. Since listing on the NASDAQ on July 19, 2018, the stock is up more than 1000% to date, compared to the Top 3-Canada-listed cannabis stocks by size, which are up on average 79% from July 19, 2018 to date.
- Market Cap: US$14.4 Billion
- 1 Month Returns: +331.2%
- Shares Held Short (as of Aug 31, 2018): 3.5M
- Short Interest Ratio (as of Sept 31, 2018): 0.70
Aurora Cannabis (TSX:ACB) – $11.02
Cannabis
Aurora Cannabis is the second-largest cannabis company listed on a Canadian exchange, with a market cap of $10.5 billion. The Company will serve the recreational and medicinal markets in Canada as well as internationally. Recent reports of possible talks between Coca Cola and Aurora have lifted its shares, although Aurora made a statement saying the Company has no beverage deal to be announced yet.
- Market Cap: $10.5 Billion
- 1 Month Returns: +44.8%
- Shares Held Short (as of Sept 4, 2018): 6.3M
- Short Interest Ratio (as of Sept 4, 2018): 0.68
Aphria Inc. (TSX:APH) – $20.80
Cannabis
Aphria, another major player in the Canadian cannabis market, has also seen its short interest rise as the industry takes off. The Company manages a portfolio of recreational and medicinal brands, including Broken Coast and Aphria One. Widespread speculation surrounding a potential investment in Aphria by a major alcohol company has helped fuel the stock’s returns over the past month.
- Market Cap: $4.8 Billion
- 1 Month Returns: +82.9%
- Shares Held Short (as of Sept 4, 2018): 18.5M
- Short Interest Ratio (as of Sept 4, 2018): 0.90
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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