The Canada-listed U.S. cannabis stocks we’ve weeded out are likely to benefit from recent M&A activity that has sparked investor interest in marijuana south of the border
SmallCapPower| April 4, 2019: On April 1, U.S. cannabis operator Cresco Labs Inc. (CSE:CL) announced its definitive agreement to acquire all shares of Origin House (CSE:OH) for C$1.1 billion. As it is considered the largest public company acquisition in the U.S. cannabis sector to date, investors are fired up once again about cannabis in the U.S. The Canada-listed U.S. cannabis stocks we’ve identified today have produced stellar gains on a year-to-date basis.
*Share prices as at April 1, 2019, data obtained from S&P Capital IQ
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Curaleaf Holdings, Inc. (CSE:CURA) – $12.33
Cannabis
Curaleaf Holdings is an integrated medical and wellness cannabis operator in the U.S. It cultivates, processes, markets, and/or dispenses a range of cannabis products in various operating markets, including flower, pre-rolls and flower pods, dry-herb vaporizer cartridges, concentrates for vaporizing, concentrates for dabbing, tinctures, lozenges, capsules, and edibles. As of January 11, 2019, the Company reported 42 dispensaries and has established its presence across 13 key states. On March 20, the Company released its Q4/18 results, reporting revenue of $32.0M, a 49% increase over Q3/18. On the same day, BlackRock, the world’s largest asset manager, invested $11M in the Company, becoming Curaleaf’s largest institutional investor. In addition, On March 21, the Company signed a deal with the CVS pharmacy chain to sell hemp products in over 800 stores across 10 states.
- Market Cap: $5.6 Billion
- 7-Day Total Return: -0.2%
- 30-Day Total Return: +21.2%
- YTD Total Return: +87.9%
Green Thumb Industries Inc. (CSE:GTII) – $20.67
Cannabis
Green Thumb Industries manufactures and sells various cannabis products in the United States. The Company sells cannabis products with a brand portfolio of over 300 stock keeping units that include products such as dried flower, concentrates for dabbing and vaporizing, edibles, and topicals. On November 13, 2018, the Company announced it has entered into a definitive agreement to acquire Integral Associates, one of Nevada’s top cannabis operators. On November 27, 2018, the Company reported $17.2M of revenue in Q3/18, a 344% year-over-year increase.
- Market Cap: $4.2 Billion
- 7-Day Total Return: +4.4%
- 30-Day Total Return: +13.3%
- YTD Total Return: +88.1%
Harvest Health & Recreation Inc. (CSE:HARV) – $13.69
Cannabis
Harvest Health & Recreation is a vertically-integrated, multi-state operator (MSO) that holds 56 licenses nationally and has a retail footprint across 11 U.S. states. Within the next 18 months, Harvest plans to cultivate more than 720,000 square feet of indoor, outdoor and greenhouse cannabis. The Company believes that its vertical approach to design, construction, and implementation should result in low production costs. On March 11, the Company entered into a binding agreement to acquire Verano Holdings LLC, one of the largest privately-held MSOs of cannabis facilities. This deal will allow Harvest to hold licences to operate up to 200 facilities in 16 states across the country.
- Market Cap: $3.9 Billion
- 7-Day Total Return: +7.1%
- 30-Day Total Return: 43.1%
- YTD Total Return: +83.6%
Innovative Industrial Properties, Inc. (NYSE:IIPR) – US$80.00
Cannabis, Real Estate Investment
Innovative Industrial Properties is a company that engages in the acquisition, ownership, and management of industrial properties that are leased to licenced operators for medical cannabis facilities. The Company operates as a real estate investment trust and is the first and sole real estate company on the New York Stock Exchange that is focused on the U.S. cannabis industry. On March 13, Innovative Industrial Properties announced Q4/18 results, reporting net revenue of $65.8 million, a 10% increase from the year prior.
- Market Cap: US$785 Million
- 7-Day Total Return: -6.5%
- 30-Day Total Return: +2.4%
- YTD Total Return: +74.9%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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