ETF MJ’s trades of the Canadian marijuana stocks on our list could potentially create a buying opportunity for retail investors
SmallCapPower | August 23, 2019: Sudden large moves by multiple cannabis stocks during the end of the first week of August may be the result of trades made by one cannabis Exchange Traded Fund, the US$1 billion ETFMG Alternative Harvest ETF (MJ) (BNN Bloomberg, 2019). Today we have identified four Canadian marijuana stocks in which the MJ ETF significantly reduced its positions and also experienced a fall in stock price by at least 13%.
*Share prices as at close August 21, 2019, data obtained from S&P Capital IQ
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Auxly Cannabis Group Inc. (TSXV: XLY) – $0.89
Cannabis
Auxly Cannabis Group is a vertically-integrated cannabis company that has multiple international operations. Originally, the Company was designed to operate as an investment company called Cannabis Wheaton Income Corp, which focused on financing cannabis producers across Canada in exchange for streaming agreements. Over the past two years, the Company has evolved its strategy from a streaming/royalty business model to a vertically-integrated cannabis operation. Auxly’s international footprint includes operations in production, extraction, processing, development and retail. On August 19, 2019, the Company announced that it has entered into a hemp cultivation and purchase agreement, in which the Company will act as the financial sponsor for the development of a hemp farming co-operative that is expected to include six individual hemp license holders based in P.E.I. Currently, the Company has funded $4.5M of the $6M it will advance and the six hemp farmers have planted about 300 acres of hemp, which is predicted to result in 100,000kg of hemp biomass. Auxly reported its Q2/19 financial results on August 16, 2019, which highlighted the Company’s $123M investment and R&D partnership with Imperial Brands and its debt financing of $84M with Sunens. During the quarter, the Company realized revenue of $2.8M. Visit the Company’s corporate website for more information.
- Market Cap: $539.9 Million
- 30 Day Return: 22%
- 90 Day Trading Average (1,000): 1,134
- 30 Day Trading Average (1,000): 2,362
VIVO Cannabis Inc. (TSXV: VIVO) – $0.46
Cannabis
Previously known as ABcann Global Corporation, VIVO Cannabis manufactures and distributes medical cannabis. In April 2018, the Company received its production and sales license from Health Canada. For 2019, the Company estimates its capacity to be 1,500 kg of indoor cannabis with an additional 14,000 kg grown in greenhouse facilities. The Company’s current premium brands include Beacon Medical™, Fireside™, Canna Farms™ and Lumina™. In order to increase supply and distribution, the Company has entered into agreements relating to strategic equity investments in Canadian cannabis retailers National Access Cannabis Corp., Choom Holdings Inc, and Westleaf Cannabis Inc, all of which either have operations within Ontario or have plans to begin operating in Ontario. On July 30, 2019, the Company announced that its wholly-owned subsidiary, ABcann Medicinals, received approval from Health Canada to begin its extraction operations, which will utilize an on-site super-critical CO2 extraction system. VIVO announced on August 6, 2019, that its wholly-owned subsidiary, ABcannn Medicinals Inc., received a Standard Cultivation license for its Kimmetts facility in Napanee, Ontario. This will bring the Company’s total licensed capacity up to over 12,000 kg. Visit the Company’s corporate website for more information.
- Market Cap: $136.1 Million
- 30 Day Return: -4%
- 90 Day Trading Average (1,000): 662
- 30 Day Trading Average (1,000): 542
The Supreme Cannabis Company, Inc. (TSX: FIRE) – $1.62
Cannabis
The Supreme Cannabis Company is based in Canada and focuses on selling to the wholesale sector for the medical cannabis market in Canada. Through its subsidiary, 7ACRES, the Company operates a 440,000 sq.ft cultivation facility outside of Toronto. The Company’s portfolio also includes: 1) Blissco Cannabis Corp, a wellness cannabis brand and multi-licensed processor and distributor in British Columbia; 2) Truverra Inc., a global medicinal cannabis brand and licensed cultivator the Company acquired on August 13, 2019; 3) Cambium Plant Sciences, a plant genetics and cultivation company; 4) Medigrow Lesotho, an southern Africa-based cannabis oil producer; 5) Supreme Heights, an investment platform that works on CBD brands in the UK and; 6) a brand partnership and licensing deal with Khalifa Kush Enterprises Canada. On August 13, 2019, the Company announced its guidance for Q4/19 and Fiscal 2020, which showed anticipated revenue of $19M for Q4/19, expected to be an increase of around 449% when compared to Q4/18. The Company is predicting net revenue for fiscal 2020 to be between $50M and $180M. Visit the Company’s corporate website for more information.
- Market Cap: $550.3 Million
- 30 Day Return: 17%
- 90 Day Trading Average (1,000): 612
- 30 Day Trading Average (1,000): 978
Canopy Rivers Inc. (TSXV: RIV) – $2.50
Cannabis
Canopy Rivers is a cannabis venture capital investment and operating platform. The Company invests in all aspects of the cannabis value chain. The Company has a strategic partnership and cornerstone investment from Canopy Growth Corporation. Canopy Rivers works with Canopy Growth to find strategic counterparties looking for financial and/or operating support and affiliation with the Canopy Growth group of companies. A few of Canopy Rivers’ portfolio companies include: Terrascend, YSS, Vert, and Agripharm, among others. On August 8, 2019, the Company announced that one of its portfolio companies, YSS, received its 12th cannabis retail license in Alberta. Visit the Company’s corporate website for more information.
- Market Cap: $477.7 Million
- 30 Day Return: -16%
- 90 Day Trading Average (1,000): 359
- 30 Day Trading Average (1,000): 349
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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