The Canadian marijuana stocks on our list will have sales through their supply agreements starting October 17, 2018
SmallCapPower | July 5, 2018: Bill C-45, the marijuana legalization bill, has been passed by a Senate vote of 52-29, and now is in the process of royal assent before becoming law. Canadians are expected to be able to legally consume recreational cannabis on October 17, 2018. The Canadian marijuana stocks we have identified today could continue to see strong returns as they have secured numerous supply contracts for the recreational market. These agreements guarantee cannabis producers with steady and secured revenue streams beginning on the first day of legalization.
Canopy Growth Corp. (TSX:WEED) – $38.40
Canopy Growth is the largest cannabis company listed by market cap on the TSX and NYSE. To position itself in the Canada’s recreational market, the Company has secured agreements with the Provinces of Quebec, Prince Edwards Island, New Brunswick, and Newfoundland & Labrador to supply their adult consumer market with high-quality cannabis. In 2018, WEED through its agreements is expected to supply almost 20M grams. The Company has the largest licensed production platform in Canada, with over 600,000 sq. ft. of production space. To further solidify their leading position in the market, the Company expects to have up to an additional 5,000,000 sq. ft. of production over the next 12 months. The Company has also acquired the necessary agreements to export medicinal cannabis to Australia, Brazil and Germany. On June 20, Canopy Growth completed a $500M convertible senior notes offering.
- Market Cap: $7,709.1 Million
- Revenue Last Reported: $22.8M
- 1 Month Total Return: 1.9%
- YTD Total Return: 29.1%
Organigram Holdings Inc. (TSXV:OGI) – $5.30
Organigram is a Canada-based marijuana producer operating in New Brunswick. The Company currently produces 22,000 kg/year out of its 134,000 sq. ft. facility. OGI plans to expand this facility, increasing production to 65,500 kg by April 2019 and 113,000 kg by April 2020. The Company has signed Memorandums of Understanding with New Brunswick for the supply of 5M grams in 2018 and Prince Edward Island for the supply $8M-$12M worth of cannabis to the recreational market.
- Market Cap: $660.7 Million
- Revenue Last Reported: $3.2M
- 1 Month Total Return: 7.7%
- YTD Total Return: 29.3%
Hydropothecary Corp. (TSX:HEXO) – $ 5.11
Hydropothecary is a Canadian cannabis producer, operating a 50,000 sq. ft. grow facility in Quebec. The Company differentiates itself through its commitment to natural growth techniques and a focus on customer service. Current operations produce 3,600 kg of cannabis per year. In October 2017, construction began on a new 250,000 sq. ft. facility, anticipated to be operational by summer 2018. A second greenhouse construction project is expected to add an additional 1M sq. ft., scheduled to be completed by December 2018. With both new greenhouses operational, the Company expects to be able produce 108,000 kg of cannabis per year. The Company has a supply agreement with Quebec for the supply of 20M grams in 2018, and a total of 200M over the next five years.
- Market Cap: $975.4 Million
- Revenue Last Reported: $1.2M
- 1 Month Total Return: 6.5%
- YTD Total Return: 24.9%
Hiku Brands Company Ltd. (CSE:HIKU) – $1.41
Hiku Brands is a Canada-based, vertically-integrated licensed producer of medical marijuana. The Company was formed from the merger of DOJA Cannabis Company and Tokyo Smoke. Hiku has entered into an agreement to merge with WeedMD, subject to a shareholder vote on July 11, 2018. The combined company plans to produce 56,000 kg/annum by mid-2019. The Company owns cannabis dispensaries across Canada and has signed a supply agreement with Manitoba for 2M grams in 2018.
- Market Cap: $198.0 Million
- Revenue Last Reported: $0.3M
- 1 Month Total Return: 11.9%
- YTD Total Return: -40.8%
Supreme Cannabis Company Inc. (TSXV:FIRE) – $1.64
Supreme Cannabis is a Canada-based licensed producer of medical marijuana. The Company’s primary asset is 7ACRES, which currently operates a 40,000 sq. ft. facility that produces 5,000 kg per year. The Company is also developing a 342,000 sq. ft. facility at 7ACRES that anticipates 50,000 kg of annual production. Presently, the Company has supply agreements with the Manitoba and CannMart Inc. for a total of 2.7M grams in 2018.
- Market Cap: $432.0 Million
- Revenue Last Reported: $2.1M
- 1 Month Total Return: -0.6%
- YTD Total Return: -28.4%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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