Which Canadian Cannabis stocks are the best to buy?
Marijuana stocks have been one of the most talked about sectors since Canada made recreational use legal last year. Many analyst are predicting that the marijuana industry could grow to 50-130 billion in revenue by 2030. These analyst believe it could become a bigger market than the Alcohol beverages market which currently takes up 16.5% of the US beverage market. I believe some of these estimates are very optimistic and some may be unrealistic, even though the Global Alcohol beverage market has slower growth and a CAGR of just over 3% compared to the marijuana market which is around 25% CAGR. Regardless of how bullish you are with the estimates almost everyone can agree that the Cannabis market still is looking at huge growth over the next ten years.
Short Summary of the top Cannabis stocks
I am not here to tell you which stock you should buy or which company you should invest in. What I will do is provide short summaries based on recent events with the company so you can make your own decisions.
CGC – Canopy Growth – TSX: WEED
Canopy Growth as of 05/09/2019 is currently at 46.90 a share and has a current market cap of 16.26 Billion. They have 344.14 million shares outstanding. The average volume over the last 10 days is 6.6 million. They have an EPS of -2.01 and a revenue per employee of $115,040. The company CEO is Bruce Linton. Over 144,000 Robinhood users currently have shares of the stock.
Canopy made a huge splash last year when Constellation the company that makes the beer Corona bought 38% of the company. At the time they spent billions to buy shares of Canopy at an average premium of over 51% of the market value at the time. This acquisition brought a lot of attention to the entire Cannabis Sector.
In recent news Canopy has signed a condition agreement with Acreage Holdings a US based marijuana company. This agreement will allow CGC to make a quick transition to the American market if/when Cannabis is legalized on a federal level. CGC also has recently acquired C3 the German based Cannabinoid Compound company. This acquisition allows them to have access to the medical marijuana market with the product Dronabinol. Canopy has been very active in establishing new brands and making new supply agreements.
HEXO – Hexo Corp. TSX: Hexo
Hexo is currently at $7.37 a share and has a current market cap of 1.58 billion. They have 210.61 million Outstanding shares. The average volume over the last 10 days has been 4.12 million shares traded. It’s current EPS is at -0.11. The CEO is Sebastien St. Louis. Currently over 118,000 Robinhood user own shares of it.
Hexo has received an agreement to supply a large amount of marijuana in Quebec which is the second most populated providence in Quebec. Hexo market share in Quebec is currently just under 40% which is a significant amount of market share. Last year Hexo announced a joint agreement with Molson Coors Brewing company to develop Cannabis-infused beverages. Hexo acquired Newstrike Brands which gives them almost 500,000 square feet of production capacity. Hexo specializing in CBD and a lot of investors are drawn to its lower market cap.
TLRY- Tilray Inc.
TLRY is currently at 46.40 a share with a current market cap of 4.46 Billion. They currently have 80.13 million shares outstanding. They have an EPS of -.073 and have revenue of $62,690 per employee. Brendan Kennedy is the CEO. just over 35,000 users of Robinhood own shares of it.
TLRY just announced this week it plans to spend 32.6 million to add an addition 200,000 sq. ft to three facilities. The company now has almost 1.4 million Sq Ft for its product and manufacturing world wide. TLRY is one of the few cannabis stocks that is down for the year largely due to insider selling. Privateer Holdings which owns the majority of TLRY decided not to sell their shares when the lockout ended earlier this year. At the time the stock was at nearly $100 a share. TLRY has yet to get a big deal like CRON and CGC. Given most of the float being locked up it is very possible there could be a price increase before Privateer Holdings sells their shares.
CRON – Cronos Group INC.
CRON has a current share price of 14.10 a share. It’s market cap is 2.75 Billion and has an EPS of -0.08. It’s average Revenue per Employee is at $19,100. The CEO is Michael Gorenstein. It has roughly 187,000 users of Robinhood that own shares in it.
CRON received 1.8 billion from Altria Group. that equity investment at the end of last year brought a lot of attention to Cronos and the stock price went up significantly. Altria has a lot of resources at their disposal which could mean they could help a lot with the growth and expansion. CRON reported a 120% increase in year over year revenue the first Quarter. Cronos stock price is coming back down to earth and may be a good one to watch soon.
ACB – Aurora Cannabis Inc.
ACB is currently at $8.38 a share. It has a market cap of 8.7 billion and currently has 1.01 billion shares outstanding. Its EPS is -0.02 and its revenue per employee is $94,400. Nearly 440,000 Robinhood users own shares of ACB.
ACB focuses on both the recreational and the medical marijuana market. They just hired billionaire activist investor Nelson Peltz as a strategic advisor. They currently in twenty four different countries. ACB has the production capacity that allows it to outproduce all other marijuana companies.
Now it is your turn to vote on which marijuana stock will do the best over the next five years.