The Canada-listed, U.S. marijuana stocks we’ve weeded out could benefit the most from the recent U.S. midterm election results
SmallCapPower | November 14, 2018: The U.S. midterm elections took place on November 6, 2018, with the Republican Party retaining control of the U.S. Senate while conceding control of the House of Representatives to the Democrats. Following the election, Attorney General Jeff Sessions submitted his resignation. These developments indicate a changing political landscape that could be positive for cannabis legalization in the United States. Jeff Sessions was an outspoken opponent of cannabis legalization, and the Democratic Party has displayed more public support for cannabis legalization than Republicans. Coincidentally, on November 6, Michigan became the 10th U.S. state to legalize marijuana for recreational use, echoing research that indicates that 60% of the U.S. population support cannabis being legal. While the timeframe for federal legalization remains uncertain, it is expected that banking regulations on cannabis-based companies could loosen. Under new banking policies, U.S. cannabis producers would be able to tap into debt capital market, a move that could narrow the valuation gap between U.S. and Canadian cannabis players. Today, we have identified three Canada-listed, U.S. marijuana stocks that will likely benefit most from the changing political landscape in United States. Note: metrics reflect closing prices as at November 12, 2018.
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Curaleaf Holdings Inc. (CSE:CURA) – $8.20
Cannabis
Curaleaf Holdings is a vertically-integrated cannabis company operating in 10 states across the United States including: Arizona, Connecticut, Florida, Maine, Maryland, Massachusetts, Nevada, New Jersey, New York and Oregon. Additionally, the Company is currently in the process of acquiring licenses to sell cannabis in the states of California and Pennsylvania. On October 29, 2019, Curaleaf listed on the Canadian Securities Exchange (CSE) and completed the largest cannabis equity financing to date raising approximately US$400 million.
- Market Cap: $3,753 Million
- 1-Month Total Return: 12.3%
- EBITDA (Last Quarter): -5.6 Million
- Average Daily Volume (3 Month Average): 1,330,000
MedMen Enterprises Inc. (CSE:MMEN) – $6.31
Cannabis
MedMen Enterprises is a vertically-integrated cannabis company focused on the U.S. market. The Company has 18 facilities that manufacture and distribute their cannabis product in California, Nevada and New York. On June 6, the Company completed an acquisition of Treadwell Simpson Partnership and its affiliate. Through this transaction, MedMen gained access to Treadwell Nursery’s cultivation facility in Florida and has the license to open 25 additional medical dispensaries in Florida. On October 19, MedMen announced its intent to acquire PharmaCann for US$682 million, which drove the recent upswing in the stock. Once closed, the acquisition effectively positions MedMen in 12 states, including New York, Illinois, and Pennsylvania. The Company has been aggressively expanding, having recently agreed to acquire additional vertically-integrated operations in Arizona for US$33 million in cash and stock, as well as raising $120 million in equity financing (announced November 9, 2018).
- Market Cap: $2,785 Million
- 1-Month Total Return: -15.2%
- EBITDA (Last Quarter): -83.7 Million
- Average Daily Volume (3 Month Average): 229,000
Planet 13 Holdings Inc. (CSE:PLTH) – $2.91
Cannabis
Planet 13 Holdings operates cannabis cultivation facilities and dispensaries across Nevada. The Company has a total cultivation capacity of 2,100 lbs/year from its two cultivation facilities in Las Vegas and Beatty, Nevada. The Company’s Planet 13 Superstore, a 40,000 sq. ft. dispensary, is located adjacent to the Las Vegas strip and is projected to serve over 2,000 customers daily. On November 12, 2018, the Company launched its wholly-owned brand, TRENDI, a product line that is specifically designed to appeal to Las Vegas tourists and will be exclusively available for purchase at the Planet 13 Superstore.
- Market Cap: $341 Million
- 1-Month Total Return: 10.2%
- EBITDA (Last Quarter): -0.08 Million
- Average Daily Volume (3 Month Average): 18,000
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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