The Canada-listed cannabis stocks we’ve identified today have seen an average return of +39.7% over the past week, while the HMMJ was 9.8% lower
SmallCapPower | November 15, 2019: Shares of Canadian licensed cannabis producers continued to see more selling pressure in the beginning of November, as Tilray, Cronos Group, Canopy Growth, and Aurora Cannabis reported financial results this week. As a benchmark, the Horizons Marijuana Life Sciences Index (TSX:HMMJ) is down 15% over the past 30 days and down 60% from its 2019 high of $23.65 on March 19, 2019. As we move into the legalization of edibles in Canada, we could likely see some strong leaders in the cannabis space forming. Today we have discovered four Canada-listed cannabis stocks that have gone against the trend and have seen significant share-price appreciation over the past week.
*Share price data as at November 14, 2019, data obtained from S&P Capital IQ
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Pure Global Cannabis Inc. (TSXV:PURE) – $0.14
Cannabis
Pure Global Cannabis is focused on cultivating and refining cannabis products for sale in the medicinal and recreational markets. Located in Brampton, Ontario, the Company utilizes hydroponic cultivation to generate industry-high yields. The Company’s PureSinse brand is strategically partnered with clinics and health-care professionals, which gives the Company a strong foothold to penetrate the Health and Wellness sector. On October 24, 2019, Pure Global announced that it had been awarded an amendment to its processing license, allowing its subsidiary, PureSinse, to sell extracts, topicals, and edibles to medical and legal adult consumer markets. This is a positive development for Pure Global, as the Company has submitted 20 SKUs to Health Canada, and it is expecting to begin selling its high-margin products towards the end of December 2019.
- Market Cap: $21.4M
- 5-Day Return: +40.0%
- 30-Day Return: +7.7%
- 30-Day Average Trading Volume: 364,950
Halo Labs Inc. (NEO:HALO) – $0.39
Cannabis
Halo Labs is an Oregon-based cannabis extraction company with expertise in cultivation, processing, and distribution. On December 12, 2018, Halo Labs announced a letter of intent to enter into a partnership with Bophelo Bioscience and Wellness Pty Ltd, a cannabis company based in Lesotho, South Africa. Under the agreement, Halo Labs is to provide management services and expertise to build, design, and operate cGAP cultivation and cGMP extraction facilities in exchange for a 20% equity position in Bophelo Bioscience, as well as a royalty on future extracted products. On June 17, 2019, Halo entered into an agreement to acquire the remaining shares of Bophelo Bioscience for $24.7M. Recently, in September, Halo announced it had been approved for a C$10.0M credit facility and, on October 11, 2019, announced it had closed a C$4.0M private placement. Halo intends to drawdown its credit facility by $1.0M for working capital purposes and the funds from the private placement for continued expansion efforts in California.
- Market Cap: $94.1M
- 5-Day Return: +92.0%
- 30-Day Return: +52.4%
- 30-Day Average Trading Volume: 323,930
Planet 13 Holdings Inc. (CSE:PLTH) – $2.14
Cannabis
Planet 13 Holdings cultivates, produces, and distributes medical and recreational cannabis in Nevada. The Company owns the world’s largest cannabis store, the Planet 13 Superstore. This store acts as a showcase for a growing portfolio of branded products, including vapes, edibles, pre-rolls, and concentrates. Planet 13’s ambition is to operate high-end dispensaries in Tier-One markets nationwide and to sell its brands in both its branded stores and wholesale. The Company’s brands include Medizin, Trendi, and Leaf & Vine. On August 29, 2019, PLTH reported Q2/19 financial results, highlighted by $16.5M in revenue, a net loss of $1.0M and adjusted EBITDA of $2.7M. Planet 13 is planning on opening a 15,000 sq. ft expansion to its Superstore during Q3/19, which will include a customer-facing production facility, a restaurant, a coffee shop, and event space.
- Market Cap: $292.6M
- 5-Day Return: +17.1%
- 30-Day Return: -7.2%
- 30-Day Average Trading Volume: 126,960
Curaleaf Holdings, Inc. (CSE:CURA) – $6.83
Cannabis
Curaleaf a vertically-integrated, multi-state cannabis operator (MSO) in the United States. As of August 2019, Curaleaf operates in 12 states with 48 dispensaries (without Grassroots and Select), 13 cultivation sites, and 12 processing sites. On July 17, 2019, Curaleaf announced it would acquire Grassroots, the largest private MSO in the United States. Grassroots has 61 dispensary licenses (20 operational in 5 states), 8 cultivation licenses (5 operational in 5 states), and 7 processing licenses (5 operational in 5 states). This follows an announcement from May 1, 2019, when Curaleaf announced its plans to acquire Select Brands, a leading U.S. West Coast MSO. The transaction is expected to add ~300,000 sq. ft of cultivation space and 10 dispensaries (operational and pending). The combined entity, with the Grassroots and Select acquisitions, will operate in 19 states, with 68 operational dispensaries, 26 processing and 20 cultivation facilities and licenses to open 131 dispensaries across the U.S. On October 29, 2019, Curaleaf repriced the Select transaction 40% lower, due to deteriorating market conditions. Curaleaf was expected to issue 95.5M shares valued at ~$1.3B with an additional earn out of $260M. Now, CURA is going to issue 55M shares.
- Market Cap: $3,198.6M
- 5-Day Return: +9.9%
- 30-Day Return: -20.1%
- 30-Day Average Trading Volume: 405,690
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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