The Canadian marijuana stocks we’ve weeded out are expected to have strong QoQ revenue growth during the next four quarters
SmallCapPower | June 28, 2019: Projected revenue growth is a useful tool in helping to predict a stock’s future worth. To forecast the predicted revenue, analysts look at data from the company, the industry and consumers to find information to back up their predictions. Today we have uncovered four Canadian marijuana stocks with market caps under $5 billion that are predicted to have strong QoQ growth when comparing its most recent quarter’s revenue to next years’ estimated revenue for the same quarter (e.g. Q1/19 vs. Q1/20).
*Share prices as at close June 26, 2019, data obtained from S&P Capital IQ
Valens GroWorks Corp. (CSE:VGW) – $4.10
In Kelowna, British Columbia, the pure play cannabis extraction company Valens GroWorks has a 25,000 sq. ft extraction, post processing and analytical testing facility. Valens has signed extraction agreements with 6 of the Top 10 licensed cultivators including: The Green Organic Dutchman (TSX:TGOD), Organigram (TSX:OGI), Tilray (NASDAQ:TRLY), Canopy Growth (TSX:WEED), HEXO Corp. (TSX:HEXO), and Harvest One (TSXV:HVT). The Company has utilized all four extraction methods (CO2, ethanol, hydrocarbon and solventless). Valens also has a strategic partnership with ThermoFisher Scientific, one of the world’s leading manufacturers of lab equipment, in addition to an ISO 17025 labs accreditation, which allows the Company to conduct standardized testing for over 400 different metals, pesticides, terpenes, residual solvents, microbials, and cannabinoid profiles. On June 18, 2019, the Company announced it had increased its annual extraction capacity to 425,000kg and has plans to increase its annual capacity to over 1,000,000kg.
- Market Cap: $493.3 Million
- YTD Return: 173.5%
- 90-Day Trading Volume (1,000s): 1,059
- Last Reported Quarter Revenue (Q1/19): $2.2 Million (Actual)
- Next Year’s Quarter Estimated Revenue (Q1/20): $23.0 Million (Consensus Estimate)
- QoQ Forecasted Revenue Growth: 945.5%
SLANG Worldwide Inc. (CSE:SLNG) – $1.49
SLANG focuses on acquiring and developing market-proven regional brands and developing new brands to help meet the changing needs of cannabis users globally. The Company sells products at more than 2,600 stores across Arizona, California, Colorado, Florida, Oregon, Maine, Massachusetts, Michigan, Nevada, New Mexico, Vermont, Canada, Puerto Rico and Jamaica. On May 30, 2019, SLANG announced its Q1/19 financial results, which showed net operating revenue of $5 Million. On June 26, 2019, the Company announced a new strategic partnership with licensed processor Elite Cultivation LLC, to offer its branded cannabis products to patients in Oklahoma.
- Market Cap: $330.0 Million
- YTD Return: -25.1%
- 90-Day Trading Volume (1,000s): 645
- Last Reported Quarter Revenue (Q1/19): $4.0 Million (Actual)
- Next Year’s Quarter Estimated Revenue (Q1/20): $89.7 Million (Consensus Estimate)
- QoQ Forecasted Revenue Growth: 2136.4%
The Green Organic Dutchman Holdings (TSX:TGOD) – $3.16
Green Organic Dutchman Holdings is a Canada-based cannabis producer with operations spanning from Ontario to Quebec. TGOD has already received the ACMPR cultivation and sales license but its two facilities are currently under construction. The Company aims to be the lowest-cost producer in Canada by accessing the lowest power rates within the provinces in which they operate. The combined production capacity of the two fully-funded facilities totals 1,643,600 sq. ft. and is expected to yield 219,000 kg of cannabis flower annually. TGOD also has organic hemp CBD oil operations in Canada, and through its wholly-owned subsidiary, HemPoland, distributes premium hemp CBD oil in the EU. The Company announced on April 26, that HemPoland received an Organic Certification, which sets the foundation for its CBD products to be offered throughout Europe. On June 27, 2019, the Company announced that is Valleyfield, QC facility received its organic certification from Pro-Cert.
- Market Cap: $869.8 Million
- YTD Return: 33.7%
- 90-Day Trading Volume (1,000s): 2,084
- Last Reported Quarter Revenue (Q1/19): $2.4 Million (Actual)
- Next Year’s Quarter Estimated Revenue (Q1/20): $32.0 Million (Consensus Estimate)
- QoQ Forecasted Revenue Growth: 1232.9%
HEXO Corp. (TSX:HEXO) – $6.62
HEXO is a consumer-packaged goods cannabis experience company. The Company currently operates with 2.4 million sq.ft of facilities in Ontario and Quebec. Through its hub and spokeperson strategy, the Company is partnering with Fortune 500 companies to bring its brand value, cannabinoid isolation technology, licensed infrastructure and regulator expertise to established businesses, leveraging its distribution networks and capacity. HEXO has secured the largest supply agreement in Quebec out of all Canadian cultivators. The Company has agreed to supply the SQDC with as much as 100,000 kg over three years (Year 1: 20,000 kg, Year 2: 35,000 kg, Year 3: 45,000 kg). On June 13, 2019, HEXO MED, an affiliate of HEXO Corp, announced it secured a medical cannabis license that was issued by the Greek government. This will allow HEXO MED to construct cultivation, processing and manufacturing facilities in Thessaly, Greece.
- Market Cap: $1,699.8 Million
- YTD Return: 46.3%
- 90-Day Trading Volume (1,000s): 2,645
- Last Reported Quarter (Q3/19): $13.0 Million (Actual)
- Next Year’s Quarter Estimated Revenue (Q3/20): $92.8 Million (Consensus Estimate)
- QoQ Forecasted Revenue Growth: 612.9%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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