In our opinion, the Canadian marijuana stocks were have identified from the Lift & Co. Cannabis Expo show significant promise
SmallCapPower | May 31, 2018: Members of the SmallCapPower team visited the Lift & Co. Cannabis Expo, which ran from May 25-27. The conference featured over 60 speakers and more than 20 panels & company presentations covering a variety of topics to keep the attendees in tune with the latest information about the cannabis industry. Among over 200 companies from throughout the world exhibited at the event, the Canadian marijuana stocks highlighted below stood out to us as particularly interesting. We’ve selected three producers and three cannabis-related companies.
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WeedMD Inc. (TSXV:WMD) – $1.93
Cannabis
WeedMD Inc. (TSXV:WMD) is an Ontario-based Licensed Producer under the ACMPR, growing and selling dried flower, oil, cannabis plants for medical purposes. On April 19, 2018, the Company entered into an all-stock acquisition agreement with Hiku Brands Company Ltd. (CSE:HIKU), a BC-based cannabis producer for $2.52/share, a 60% premium to the 20-day VWAP. With an exchange ratio of 1.4185 to 1, Hiku and WeedMD will own 51.75% and 48.25%, respectively, of the combined company upon the completion of the acquisition deal in June. WeedMD currently operates a 25,620 Sq. Ft. indoor facility with a production capacity of 1,500 kg. The Company recently leased 610,000 sq. ft. state-of-house greenhouse facilities for cannabis cultivation, expected to increase annual production capacity to 32,000 kg by the end of 2018.
- Market Cap: $214.6 Million
- 1 Month Total Return: 9.0%
- YTD Total Return: -21.2%
- Current Licensed Production Capacity: 25,620 sq. ft.
- EV/Sales FY2019: 2.5x
- EV/EBITDA FY2019: 8.5x
Delta 9 Cannabis Inc. (TSXV:NINE) – $1.37
Cannabis
Delta 9 Cannabis is a Canada-based licensed producer of medical and recreational cannabis. The Company operates an 80,000 square foot production facility in Winnipeg, Manitoba. The Company expects to construct 600 proprietary self-designed production units called “grow pods” by mid-2020, increasing the production capacity to 17,500 Kg of cannabis per year , estimated to generate revenues of $130M. Delta 9 is one of the four fully-licensed cannabis producers under ACMPR in the Province of Manitoba.
- Market Cap: $109.0 Million
- 1 Month Total Return: -4.2%
- YTD Total Return: -50.7%
- Current Licensed Production Capacity: 80,000 sq. ft.
National Access Cannabis Corp. (TSXV:META) – $0.78
Cannabis Retailing
National Access Cannabis is dedicated to health and consultation with health professionals. The Company continues its focus on acquiring client memberships at each of its 10 active locations across Canada by prescribing medical cannabis and providing members with ongoing education and care. The group is currently planning to develop more strategic locations with partners to provide mutual benefits in terms of both brands and profitability.
- Market Cap: $106.6 Million
- 1 Month Total Return: -11.4%
- YTD Total Return: 16.4%
Indiva Ltd. (TSXV:NDVA) – $0.73
Cannabis
Indiva is a licensed producer of medical marijuana under the ACMPR. The Company owns an 8,000 sq. ft. production and processing facility in London, Ontario and a further 21,000 sq. ft. expansion with completion expected in Q4 2018. Indiva aims to acquire a sales license and begin sales of dried cannabis and oils, also in Q4 2018. The Company plans to diversify its product offerings and continue production expansion through 2020.
- Market Cap: $60.8 Million
- 1 Month Total Return: -1.4%
- YTD Total Return: -41.1%
- Licensed Production Capacity: 8,000 sq. ft.
Quadron Cannatech Corp. (CSE:QCC) – $0.27
Cannabis Services
Quadron Cannatech provides production solutions to marijuana producers. The Company’s flagship asset is its BOSS CO2 extraction system for the creation of oil products. Its safety-certified, easy-to-use system uses CO2 to dissolve essential oils in plant materials. The Company’s creates ancillary products such as vapes and capsules, while its Cybernetics division designs and manufactures custom automated machines for producers. Quadron also holds a development and distribution agreement with Lucid Lab Group, a U.S. cannabis equipment distributor.
- Market Cap: $18.5 Million
- 1 Month Total Return: 3.8%
- YTD Total Return: -61.4%
Lexaria Bioscience Corp. (CSE:LXX) – $2.01
Pharmaceuticals
Lexaria Bioscience is a pharmaceutical company creating applications for its flagship technology, DehydraTECH. DehydraTECH combines pharmaceutical ingredients to fatty acid oils and a food or pill, then dehydrates it. The resulting product has a higher proportion of active ingredients entering blood circulation, and a 15-20-minute onset time, as opposed to the typical 60-120-minute time. This enables direct ingestion of cannabis products with high THC levels and rapid adsorption. The technology has been licensed to four cannabis beverage and edibles manufacturers, and the Company is in talks with several more. LXX also sells its own cannabis products. Lexaria aims to license DehydraTECH for use with nicotine, vitamins, and pain relief medications.
- Market Cap: $145.2 Million
- 1 Month Total Return: -1.5%
- YTD Total Return: -3.8%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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