With cannabis de-regulation quickly becoming a global phenomenon, we’ve found some Canadian marijuana stocks most likely to succeed internationally
SmallCapPower | September 6, 2019: Investors have been recently focusing their attention on the Canadian cannabis market, due in large part to the legalization of the adult-use market. However, there remains a significant opportunity for cannabis companies in international markets, as more countries legalize cannabis for medical purposes. With a population size of 740M people, Europe dwarfs both Canada and the U.S. combined. The sizable growth the European cannabis industry recently can be attributed to six countries that have announced medical cannabis legalization (Germany, Greece, Ireland, Italy, Norway, and the UK). The European cannabis market is expected to be worth up to €123.0B by 2028. Today we have discovered three Canadian marijuana stocks that have experienced significant international revenue growth.
*Share prices as at September 3, 2019, data obtained from S&P Capital IQ
Figure 1: Cannabis Company Quarterly International Revenues
Source: Company Reports, Ubika
Canopy Growth Corp. (TSX: WEED) – $33.23
Canopy Growth is the largest cannabis company listed by market cap on the TSX and NYSE. Currently, the Company has the largest licensed production platform in Canada, with over 600,000 sq.ft of production space. Additionally, Canopy Growth has secured the necessary agreement to export medicinal cannabis to Australia, Brazil, and Germany. On August 15, 2019, the Company announced Q1/19 financial results: net revenue fell 4% to $90.5M (was $94.1M in Q4/18). This follows an announcement from July 3, 2019, when Canopy announced that CEO Bruce Linton would be stepping down and a replacement would be found by majority investor Constellation Brands (NYSE:STZ). Canopy Growth generated $10.5M in international revenue during its last-reported quarter, primarily from its acquisition of German-based C3 Cannabinoid Compound Company, which sells full spectrum cannabidiol-based medicines in Germany. Visit the Company’s corporate website for more information.
- Market Cap: $11.6B
- Last Quarter International Revenues: $10.5M
- 30-Day Return: -23.5%
- 90-Day Return: -40.2%
- 90-Day Average Trading Volume: 1,834,000
Aurora Cannabis Inc. (TSX: ACB) – $7.57
Aurora Cannabis is a vertically-integrated and horizontally-diversified cannabis company that is located in Edmonton, Alberta. Currently, the Company has a funded capacity that exceeds 625,000 kg per year. Aurora Cannabis has sales operations in 25 countries across five continents. The Company has 15 global production facilities with 3 EU GMP certified, 40 clinical studies running or completed and over 77,000 medical patients served. On August 18, 2019, Aurora announced the completion of its acquisition of Hempco Food and Fiber Inc. for ~$63.4M. This acquisition provides the Company with access to low-cost, high-volume, raw hemp material for the extraction of CBD and other cannabinoids. Aurora’s Q3/18 results were highlighted by international revenue of $4.0M, a 40% increase from the prior quarter. Visit the Company’s corporate website for more information.
- Market Cap: $7.7B
- Last Quarter International Revenues: $4.0M
- 30-Day Return: -11.3%
- 90-Day Return: -26.1%
- 90-Day Average Trading Volume: 3,083,000
Tilray Inc. (NASDAQ: TLRY) – US$30.74
Tilray is focused on medical cannabis research, cultivation, and distribution. The Company operates internationally through its subsidiaries in Australia, Canada, and Germany. Tilray obtained regulatory approval to export oil-based products to Germany. Additionally, Tilray is currently funding two clinical studies in Canada, and three studies in Australia. In December 2018, Tilray announced the signing of a Joint Venture (JV) agreement with Novartis (SWX:NOVN) to research medical applications of cannabis and a partnership with Labatt Blue, a subsidiary of AB InBev (EBR:ABI) to research cannabis-infused beverages. On August 29, 2019, Tilray announced the acquisition of FOUR20, a Canadian cannabis retail chain, in a stock-and-cash deal valued at $110M. FOUR20 currently operates six licensed retail locations and has secured 16 additional locations in the province of Alberta. Visit the Company’s corporate website for more information.
- Market Cap: US$2.9B
- Last Quarter International Revenues: $1.8M
- 30-Day Return: -27.0%
- 90-Day Return: -13.6%
- 90-Day Average Trading Volume: 1,803,000
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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