The Canadian marijuana stocks we’ve weeded out have seen average revenue growth of 53.3% quarter over quarter
SmallCapPower | December 10, 2019: Cannabis stocks have had a rough six months due to the following: 1) scandals and management turnover in the industry; 2) cannabis companies are finding it hard to compete with black-market prices amongst poor retail store roll-outs in Ontario and Quebec; and 3) the recent vaping epidemic with the Center for Disease Control (CDC) reporting 2,290 cases, and 47 deaths related to vaping. Canadian cannabis companies have seen a sharp decline in stock prices since March, with the Horizons Marijuana Life Sciences Index ETF (TSX:HMMJ) down 63% to $8.97, from its most recent high of $23.65 on March 19, 2019. Amongst all the turmoil there have been some companies that have managed to rapidly grow sales. Today we have dug up four Canadian marijuana stocks that have seen impressive quarter-over-quarter revenue growth.
*Share price data as at December 6, 2019, data obtained from S&P Capital IQ
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Valens GroWorks Corp. (TSXV:VGW) – $2.95
Cannabis Extraction
Valens GroWorks is a pure-play cannabis extraction company with 425,000 kg of extraction capacity. Valens has signed extraction agreements with Organigram, Tilray, Canopy Growth, and HEXO Corp. 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.
- Market Cap: $366.4M
- 30-Day Return: -13.3%
- 90-Day Return: -19.7%
- 30-Day Average Trading Volume: 270,020
- Q2/19 Revenue $8.8M
- Q3/19 Revenue $16.5M
- QoQ Revenue Growth: +87.1%
Sundial Growers Inc. (NASDAQ:SNDL) – US$1.95
Cannabis
Sundial Growers is a Canadian cannabis cultivator that aims to target the Canadian cannabis market through three distinct brands: Heal, Help, and Play. The Heal brand is the Company’s medical cannabis line to be used as prescription medicine. 2) The Help brand is the Company’s line of CBD products. 3) Play is the Company’s adult-use line intended to enhance social, spiritual, and recreational occasions. Sundial has cultivation in Alberta, British Columbia, and the United Kingdom. Currently, Sundial Growers has 242,000 sq. ft, comprising of 12 cloning and vegetation rooms, and 74 revenue- generating flowering rooms. The modular cultivation rooms are expected to bring premium yields, as well as quality and consistency of product. Once fully constructed, Sundial’s Olds Facility will be approximately 480,000 sq. ft with 126 modular cultivation rooms.
- Market Cap: US$207.3M
- 30-Day Return: -47.9%
- 90-Day Return: -75.3%
- 30-Day Average Trading Volume: 920,620
- Q2/19 Revenue C$19.3M
- Q3/19 Revenue C$33.5M
- QoQ Revenue Growth: +73.6%
MediPharm Labs Corp. (TSX:LABS) – $3.41
Cannabis Extraction
MediPharm Labs is the first company in Canada to receive a license to become a cannabis oil processor without first having a cultivation license. MediPharm Labs produces purified, pharmaceutical-like cannabis oils and concentrates through its cGMP and ISO standard clean rooms laboratory. The Company currently has a 70,000 sq. ft. facility with 150,000 kg capacity and is planning to expand to 250,000 kg. MediPharm Labs has invested in expert, state-of-the-art technology and extraction methods to deliver safe and precisely-dosed cannabis products to consumers and patients. MediPharm Labs announced recently that it has entered into a multi-year supply agreement with Cronos Group Inc. It is expected that MediPharm Labs will supply Cronos Group with about $30M of cannabis concentrate over 18 months, and depending on renewal and purchase options, possibly up to $60M over 24 months.
- Market Cap: $446.2M
- 30-Day Return: -35.0%
- 90-Day Return: -29.4%
- 30-Day Average Trading Volume: 1,245,360
- Q2/19 Revenue $31.5M
- Q3/19 Revenue $43.4M
- QoQ Revenue Growth: +37.9%
Tilray, Inc. (NASDAQ:TLRY) – US$18.20
Cannabis
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. Tilray has a Joint Venture (JV) agreement with pharmaceutical company 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. Tilray recently 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.
- Market Cap: US$1,829.2M
- 30-Day Return: -20.9%
- 90-Day Return: -40.5%
- 30-Day Average Trading Volume: 1,997,570
- Q2/19 Revenue US$42.0M
- Q3/19 Revenue US$48.2M
- QoQ Revenue Growth: +14.6%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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