The big event that many investors are anticipating is that Canada may legalize recreational cannabis use this summer.
Should this happen, the cannabis industry could experience impressive growth, as much as 25% – 35% each year through 2021 according to some analysts who follow this industry closely.
That’s a huge expansion, not counting what might happen in the US should regulations move in favor of the cannabis industry.
What investors are excited about, however, goes beyond ease in regulations and the sales prospects of companies in this industry. Public opinion is also changing, shifting toward a more mainstreamed acceptance of cannabis.
Approximately 5 national polls were conducted in the US regarding pot legalization. The findings revealed that on average, 59% – 64% of the Americans polled supported legalization. Investors found these figures encouraging, as public support gave investors a reason to anticipate an increase in demand and sales.
Right now, there are more than 100 publicly traded cannabis-related stocks. Not all of them are worthy of investment; many are fledgling.
The following list presents the 10 largest marijuana-related stocks on the market. Disclaimer: we are NOT saying that these are necessarily investment-worthy. But we are saying that they are the largest available. Most of these are also Canadian stocks available on the OTC market.
Exercise due diligence! This article is NOT a recommendation for investment. It is strictly for education purposes only. (source of this data comes from The Motley Fool and Yahoo Finance). Market Cap relative to the time of writing – 4/10/2018
One: Canopy Growth Corporation (TWMJF) $4.15 Billion
“Canopy currently has seven grow facilities spread across 665,000 square feet, and it is in the process of developing greenhouses on 3.7 million square feet of land in British Columbia…What really makes Canopy Growth special is its distribution channels. It has physical outlets to sell cannabis, an online presence complete with the most well-known brand in Canada (Tweed), and a partnership with spirits giant Constellation Brands, which took a 9.9% equity stake in Canopy last year worth $190 million. Canopy Growth also has a burgeoning presence in foreign markets where medical cannabis is legal. It’s the most complete package, which is why it currently boasts the largest market cap.”
Two: Aurora Cannabis Inc. (ACBFF) $3.29 Billion
“After acquiring CanniMed Therapeutics in the largest marijuana acquisition in history, the company is on track for 283,000 kilograms in fully-funded, fully ramped-up, annual production…The bulk of Aurora’s annual yield comes from its organically built Aurora Sky project, which should yield over 100,000 kilograms annually, as well as its partnered Aurora Nordic project in Denmark, which is expected to produce at least 120,000 kilograms of cannabis a year. Aurora’s state-of-the-art facilities should boast some of the lowest per-gram costs in the industry.”
Three: GW Pharmaceuticals plc (GWPH) $3.27 Billion
“Though it already has an approved drug throughout Europe known as Sativex, GW Pharmaceuticals’ claim to fame looks to be experimental drug Epidiolex, a cannabidiol-based drug that’s currently under review by the Food and Drug Administration (FDA) for use in the treatment of two rare forms of childhood-onset epilepsy…In two pivotal-stage trials each for Dravet syndrome and Lennox-Gastaut syndrome — neither of which have an FDA-approved treatment — Epidiolex handily met the primary endpoint of a statistically significant reduction in seizure frequency from baseline. Though estimates vary, peak annual sales may top $500 million, if approved.”
Four: Aphria Inc. (APHQF) $1.60 Billion
“Following the acquisition of Nuuvera, the new Aphria is on track to produce approximately 230,000 kilograms of cannabis a year. This includes a four-phase expansion project that should yield 100,000 kilograms, along with a strategic partnership with Double Diamond Farms that’ll produce 120,000 kilograms…Interestingly, the acquisition of Nuuvera didn’t really boost Aphria’s annual production targets. However, it did push Aphria’s access up to a dozen countries, including Canada. In other words, its Nuuvera buyout was a major step forward for the company’s distribution channel.”
Five: MedReleaf Corp. (MEDFF) $1.19 Billion
“MedReleaf is a grower that has historically placed a strong emphasis on cannabis oil and extract production. Even though MedReleaf is only forecast to produce 140,000 kilograms of fully-funded cannabis a year, it could produce beefier margins than its peers as a result of its strong focus on higher margin oils and extracts…MedReleaf’s recent acquisition might be its most impressive. In a cash-and-stock deal, MedReleaf acquired 164 acres of land, 69 of which already had a growing facility (the Exeter facility) that could be retrofitted to cannabis production. Doing so, rather than building a greenhouse from the ground up, is a time- and money-saving venture.”
Six: Cronos Group Inc. (CRON) $1 Billion
“Cronos holds a 100% stake in cannabis growers Peace Naturals and Original BC and a 21.5% stake in Whistler Medical Marijuana. The company has smaller investments in other growers too. As is the case with practically every grower mentioned above, the expected legalization of recreational cannabis in Canada is what has pumped up Cronos’ market cap.”
Seven: The Hydropothecary Corporation (HYYDF) $504.57 Million
“The Quebec-based company, which currently prides itself on medical cannabis production, has expansion plans in the works that’ll result in 1.3 million square feet of land being used to grow 108,000 kilograms of cannabis per year…But it’s the company’s focus on non-traditional cannabis products that has intrigued investors. Hydropthecary has focused on expanding its extracts, oils, and powder line (known as Decarb, a ready to consume marijuana powder), as well as on premium medical marijuana strains that cost almost double the average per-gram selling rate for average-quality cannabis strains.”
Eight: CannTrust Holdings Inc. (CNTTF) $442.71 Million
“CannTrust Holdings is currently focusing its efforts on more than 40,000 actively registered medical patients. However, like every grower noted above, it’s in the midst of a major expansion. CannTrust’s 430,000 square foot Niagara Greenhouse remains on track and on budget to eventually produce 40,000 kilograms per year. Beyond that, the company expects to add another 600,000 square feet of capacity using a portion of the 36-acre vacant lot next to the Niagara Greenhouse…CannTrust announced in its latest quarterly results that just over 64% of its sales were a result of extracts. Extracts are a significantly higher margin product relative to dried cannabis, lending to the belief that CannTrust could offer superior margins in the future”
Nine: Cannabis Wheaton Income Corp. (CBWTF) $439.05 Million
“The ninth-biggest marijuana stock isn’t a grower at all — it’s a royalty and streaming company…Since access to capital is a challenge for most pot stocks, Cannabis Wheaton steps in with the financing they need to expand capacity or their product lines. In return, Cannabis Wheaton receives a percentage of production at a below-market cost. It then turns around and sells what it receives from its licensed partners at the market rate and books the difference as a profit… Cannabis Wheaton offers immediate geographic and product-line diversity with its more than one dozen licensed partners, without the hassles of dealing with day-to-day cannabis growing expenditures. Of course, the downside is that streaming companies like Cannabis Wheaton have high initial costs, often resulting in shareholder dilution.”
Ten: Emerald Health Therapeutics, Inc. (EMHTF) $395.25 Million
“Emerald Health has big ambitions of placing itself among Canada’s top growers by annual production, and it is currently in the process of building out two major projects that should push its annual yield over 100,000 kilograms…The first involves a from-scratch build-out of 1 million square feet in British Columbia that’ll house the company’s headquarters. The second involves a strategic partnership with Village Farms International that’ll see an existing 1.1 million square foot facility get retrofitted from tomato production to dried cannabis. This latter facility is expected to produce at least 75,000 kilograms annually when complete.”
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