The Canada-listed cannabis stocks we’ve picked out have done a good job at providing shareholders with proper and timely disclosures
SmallCapPower | October 15, 2019: Investopedia defines corporate governance as a system of rules, practices, and processes by which a firm is directed and controlled. Corporate governance involves balancing the interests of a company’s many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, and the community. Since corporate governance also provides the framework for attaining a company’s objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure with shareholders. Corporate disclosure with shareholders is very important, as investors expect transparency from management. There has been scandals in the marijuana sector recently as a result of poor disclosure (i.e. CannTrust). Today we have identified four Canada-listed cannabis stocks that have, thus far, provided their investors with timely disclosure.
*Share price data as at October 10, 2019, data obtained from S&P Capital IQ
Planet 13 Holdings Inc. (CSE:PLTH) – $2.21
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. PLTH provides monthly updates on average visitors per day to its Las Vegas store, conversion rate, average ticket size, and percentage market share of the State of Nevada sales.
Aleafia Health Inc. (TSX:ALEF) – $0.80
Aleafia Health is a vertically-integrated cannabis health and wellness company. The Company operates in four major business segments: 1) Cannabis Cultivation & Products; 2) Health & Wellness Clinics; 3) Cannabis Education and; 4) Consumer Experience with eCommerce. Operations are conducted from three cultivation facilities owned by the Company, which are comprised of: 1) Port Perry Facility, which is an indoor grow that is licensed and fully operational; 2) the Niagara Facility, which is a greenhouse in a plant-ready state that is waiting for a Health Canada cultivation license; and 3) the Paris Facility, which is a 25,000 sq. ft facility that is federally licensed for cultivation, processing and sale of medical and recreational cannabis. On July 15, 2019, the Company secured a Health Canada license amendment to increase its outdoor cultivation area at Port Perry from 292,000 sq. ft to over 1.1M sq. ft. Currently, the Company serves 60,000 medical patients. On August 14, 2019, the Company reported its Q2/19 financial results, which showed record revenue of $4M, an increase of 159% when compared to the previous quarter. Aleafia’s management has also provided guidance for Q3/19, reporting that it expects to turn a profit during Q3. ALEF discloses how many patients the Company has, aggregate clinic visits, and has done a good job of updating shareholders on its outdoor grow via its Instagram account.
Aurora Cannabis Inc. (TSX:ACB) – $4.96
Aurora Cannabis is a vertically-integrated and horizontally-diversified cannabis company that is located in Edmonton, Alberta. Currently, the Company has a funded capacity that exceeds 625,000kg per year. Aurora Cannabis has sales operations in 25 countries across five continents. The Company has 15 global production facilities with 3 EU GMP certified, 40 clinical studies running or completed and over 77,000 medical patients served. On September 11, 2019, Aurora reported Q4/19 results, highlighted by total revenue of $98.9M, with $94.6M of cannabis net revenue. Total revenue missed management guidance of between $100M – $107M, but net cannabis revenue met guidance of between $90M and $95M. Aurora does provide disclosure on each of its 15 cultivation facilities in its quarterly MD&A, along with a timeline of when it expects the facilities to be complete.
- Market Cap: $5,102.7M
- 30-Day Return: -40.5%
- YTD-Return: -25.8%
- 30-Day Average Trading Volume: 7,025,570
Pure Global Cannabis Inc. (TSXV:PURE) – $0.13
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, giving the Company a strong foothold to penetrate the health and wellness sector. PURE reported Q2/19 financial results on August 29, 2019, highlighted by revenue of $1.0M (was $25K during Q1/19). With its recent developments, the Company is on track to meet its guidance of material revenues by Q3/19. Pure Global does a good job at updating investors on licensing status with Health Canada. In January, PURE announced it had received a Health Canada sales license, then in March they updated investors that its facility had been inspected for its oils license, and then announced on September 9, 2019, that the facility had received the oil sales license. Pure Global has also disclosed all of its partnerships and acquisitions, including a recently-announced Joint Development Agreement to source industrial hemp from China, as well as distribution agreements with Velvet Management and CannMart.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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