The Canadian cannabis stocks we’ve weeded out all have short interest ratios greater than 3.5x
SmallCapPower | June 20, 2019: The cannabis industry is characterized by growth and bullish speculation, with regulations being loosened worldwide. However, many investors do not believe all the hype and have an intuition that the industry is overvalued. Today we have dug up four Canadian cannabis stocks with the largest short position, as of June 6, 2019.
*Short interest ratio is calculated by dividing shares held short by the 30-Day average trading volume
**Share prices as at close Tuesday, June 18, 2019, data obtained from S&P Capital IQ
HEXO Corp. (TSX:HEXO) – $7.42
Headquartered in Gatineau, Quebec, HEXO is a consumer-packaged goods (CPG) cannabis company that manufactures and distributes products in the Canadian market. HEXO specializes in medical cannabis and aims to become the highest-quality producer and distributor of medical cannabis products throughout Europe. The Company is one of the largest licensed cannabis companies in Canada. HEXO operates 1.8M sq. ft of production facilities in Ontario and Quebec, yielding 150,000 kg annually. On June 13, HEXO received a medical cannabis installation license issued by the Greek government. This license will allow HEXO to establish cultivation, processing, and manufacturing facilities in the region of Thessaly, Greece.
- Market Cap: $1.9B
- YTD Return: 58.2%
- 30 Day Average Trading Volume: 2,144,000
- Shares Held Short: 8,268,710
- Short Interest Ratio: 3.9x
Auxly Cannabis Group Inc. (TSXV:XLY) – $0.74
Auxly Cannabis Group is a vertically-integrated cannabis company with diverse international operations. Initially, the Company was set up as an investment company, called Cannabis Wheaton Income Corp., which sought to finance cannabis producers across Canada in exchange for streaming agreements, which allowed Auxly to access a portion of the supply from these companies. Over the past two years, Auxly has progressively developed its strategy from a streaming/royalty business model to a vertically-integrated cannabis business. The Company has an international footprint and assets & operations throughout the cannabis value chain, which include production, extraction, processing, development, and retail.
- Market Cap: $448.9M
- YTD Return: -19.8%
- 30 Day Average Trading Volume: 422,000
- Shares Held Short: 5,936,326
- Short Interest Ratio: 14x
Golden Leaf Holdings Ltd. (CSE:GLH) – $0.06
Golden Leaf Holdings is a Canadian cannabis company that has operations in Oregon, Nevada, and Canada, with cultivation, production and retail operations built around recognized brands. The Company produces and distributes various types of products, such as cannabis flower and cannabis oils. Golden Leaf distributes its products through its branded Chalice Farms retail dispensaries, as well as through third-party dispensaries. Golden Leaf’s key craft cannabis brands sold at its dispensaries include: Golden, Jackpot, and Elysium Fields. On June 17, Golden Leaf Holdings announced that the Company’s Board of Directors has appointed John Varghese to succeed Karyn Barsa as Interim President and CEO of the Company through a strategic assessment of its management and operations.
- Market Cap: $35.3M
- YTD Return: -48.1%
- 30 Day Average Trading Volume: 810,000
- Shares Held Short: 5,729,539
- Short Interest Ratio: 7.1x
Harvest One Cannabis Inc. (TSXV:HVT) – $0.63
Based in Vancouver, Harvest One is a global cannabis company that develops and provides innovative lifestyle & wellness products to consumers & patients in regulated cannabis markets throughout the world. The Company’s range of lifestyle solutions is designed to enhance quality of life. HVT has significant exposure to the entire cannabis value chain through three wholly-owned subsidiaries: United Greeneries, Satipharm, and Dream Water. On May 30, Harvest One announced Q3/19 results; the Company had a net loss of $5.1M on revenues of $3.0M, a change of -54% and -19%, respectively, from the previous quarter.
- Market Cap: $117.1M
- YTD Return: 66.7%
- 30 Day Average Trading Volume: 226,000
- Shares Held Short: 4,033,359
- Short Interest Ratio: 17.8x
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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