The cannabis stocks we’ve discovered could be big winners following Israel’s decision to allow cannabis exports
SmallCapPower | February 4, 2019: On January 27, 2019, the Israeli government approved exports of medical cannabis. This new development could adversely affect Canadian LPs exporting cannabis to the EU, as Israel’s proximity and advanced cannabis R&D give it a real trade advantage. Today, we have identified three cannabis stocks with operations in Israel, which could benefit from the new cannabis export laws in that country.
*Share prices as at close January 31, 2018, data obtained from S&P Capital IQ
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Cronos Group Inc. (TSX:CRON) – $25.75
Cannabis
Cronos Group operates two wholly-owned Canadian licensed producers, Original BC and Peace Naturals. The Company engages in international production and distribution across five continents. Cronos Group aims to expand its global footprint as it focuses on building an international brand portfolio and developing disruptive intellectual property. The Company has a strategic joint venture with Kibbutz Gan Shmuel, a commercial farming community. Together, Cronos Group is set to build a 45,000 sq. ft. greenhouse in Israel, which will help supply the international medical cannabis markets, primarily in Europe.
- Market Cap: $5.0 Billion
- 1-Week Total Return: +21.3%
- 1-Month Total Return: +61.2%
Aura Health Inc. (CSE:BUZZ) – $0.26
Cannabis
Aura Health is an international cannabis company with a network of vertically-integrated cannabis assets. The Company has product lines of cannabis-infused edible products and oil extracts. The Company holds convertible debt that converts to 54% equity of HolyCanna, a cultivation and nursery license holder in Israel. HolyCanna has begun construction of a 60,000 sq. ft greenhouse that is expected to be completed by H2/2019. Aura signed a LOI with CannabiSendak to build a high-profile dispensary in Tel Aviv that will be exclusively supplied by HolyCanna. The Company also owns a 30% interest in four medical marijuana clinics in the U.S. Sun Belt.
- Market Cap: $11.6 Million
- 1-Week Total Return: -5.5%
- 1-Month Total Return: +18.2%
Namaste Technologies Inc. (TSXV:N) – $1.37
Cannabis
Namaste Technologies is an international cannabis eCommerce company that utilizes machine learning to provide patients access to medical cannabis products. Through Namaste MD, the Company established a secure telemedicine portal designed to connect doctors and patients in need of medicinal cannabis. The Company has a 10% stake in Cannbit, one of the few public licensed marijuana operations in Israel. Namaste also has a collaboration and supply agreement with the company to purchase medical cannabis. As a result, the new export laws could significantly grow Cannbit’s revenue base, directly impacting Namaste.
- Market Cap: $419.86 Million
- 1-Week Total Return: -6.0%
- 1-Month Total Return: +31.7%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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