Numerous cannabis stocks experienced a drastic surge in 2018, leaving early investors with massive profits and supporters of the legalization movement jumping for joy. According to revenue forecasts on the global cannabis market — which are are nothing short of astronomical – this could just be the beginning.
Some experts project it to be in the hundreds of billions, as can be read in one of Grand View Research’s assessments on the subject. Nonetheless, the legal cannabis industry is still very young and companies have yet to gather a lot of experience when it comes to growing, distributing, selling and branding their marijuana products. This makes it important to watch closely as to which steps are undertaken by the ones that are already big in business, and how the smaller fish navigate in order to catch up.
In this article, the Strain Insider team gathered information as well as the price history of the most well-known cannabis stocks. In addition, there are also some assets which are still flying under the radar. Please note that the cannabis stocks presented here already made it onto the big public exchanges, while many of their competitors didn’t. Regulations imposed on the cannabis sector are still very strict and that’s why numerous cannabis stocks can only be obtained on the OTC Market.
That being said, let’s dive right into it.
The most popular cannabis stocks
Aurora Cannabis Inc.
Market Cap: 12 Billion CAD
Exchange: TSX / NYSE
Aurora Cannabis Inc. is based in Edmonton, CA, and operates in over 20 countries. It is the biggest cannabis producer worldwide and the second largest by market value after Canopy Growth Corp. Its growing capacity is estimated to yield about 250,000 kg of cannabis in 2019, with a potential to reach up to 700,000 kg by the year of 2020.
In regard to its market share, Aurora is considered to be an international leader when it comes to medical cannabis, fulfilling the lion’s share of the demand in European countries like Germany, while it also captured about 20 percent of the recreational cannabis market in Canada during the final quarter of 2018.
In order to secure its number one spot among cannabis growers in the future, Aurora runs a growth-by-acquisition strategy. It acquired numerous cannabis companies over the past 3 years, amongst which are the likes of ICC Labs, an addition that will further ramp up Aurora’s production capacity by a considerable margin.
Revenue: 55,196,000 CAD EPS, diluted (ttm): -0.10
Return on Equity (ttm): -3.17 Forward P/E: N/A
ACB has gained almost 70 percent since the start of this year and is up 62 percent over the last 12 months. The resistance at the $14 to $15.20 range is very strong as the price essentially got rejected three times at that level, with the third attempt not even reaching the $14 mark. Since the start of 2018 the chart has been forming an equilibrium, with the price wandering back and forth between the crucial support zone at $6.15 and said resistance, unable to make new highs or lows. If this cycle were to continue, the price of ACB would be due for a sharp decline with a potential loss of -47% in case the support at $6 will be retested once more.
Canopy Growth Corporation
Symbol: WEED / CGC
Market Cap: 23 Billion CAD
Exchange: TSX / NYSE
Canopy Growth Corp. is based in Ontario, Canada, and holds the second spot after Aurora in terms of annual cannabis production volume. However, it is the largest cannabis producing company by market capitalization. It focuses on the manufacturing of medical cannabis products, recreational cannabis flowers as well as the cultivation of industrial hemp. Canopy owns more than 520,000 square meters of cultivable acreage of which around 400,000 square meters are licensed by Health Canada. The company is estimated to be able to produce up to 500,000 kg of cannabis annually in the upcoming future.
Canopy is investing heavily in expansion, as it plans to further upgrade its licensed growing space as well as to build large hemp CBD manufacturing sites in New York. In addition, it has a partnership with Constellation Brands, which holds a 38 percent stake in Canopy after its quite opulent investment of $4 Billion in mid-2018.
Putting all these factors into perspective, Canopy Growth Corporation has a very strong standing in the Canadian as well as the international cannabis market. And it seems like that isn’t going to change any time soon as it is positioned closely behind Aurora and other competitors will still need to catch up.
Revenue: 77,950,000 CAD EPS, diluted (ttm): -1.79
Return on Equity (ttm): -9.50% Forward P/E: -153.80
Canopy Growth stock is up more than 63 percent so far this year and almost 100 percent over the last 12 months. However, it faces strong resistance at the $50 to $57 range, which it was unable to break on various occasions. The next key support area can be found at $25. Until February of this year, CGC has been on a clear uptrend since August 2015, consistently forming higher highs and higher lows.
As of now, the price is about to potentially make a double top and could hence experience rejection to the downside before continuing the trend. A look at the Relative Strength Index (RSI) on higher time frames confirms that the price is losing strength and might be due for further downward corrections.
Market Cap: 5.5 Billion USD
Tilray is another entry on the list of large Canadian cannabis producers operating on an international level. Its headquarters are located in Nanaimo, CA, and the pharmaceuticals company was the first ever cannabis firm to have an Initial Public Offering (IPO) on the NASDAQ, which occurred in July of 2018. In the past, Tilray excelled at establishing valuable partnerships in the form of joint ventures and distribution channels.
Two very promising of those partnerships were made in December 2018. The acquisition of Novartis enables Tilray to sell part of their medical cannabis products on a global scale instead of being restricted to the domestic market.
The second partnership is the $100 million joint venture with Annheuser-Busch InBev, the company behind the popular beer brand Budweiser. The goal of this business cooperation is the creation of THC and CBD infused beverages that will be sold in Canada as soon as proper regulations for such products are in place. With Annheuser-Busch, Tilray managed to secure yet another strong partner with whom it will seek to enter the cannabis edibles market.
Revenue: 43,130,000 USD EPS, diluted (ttm): -0.82
Return on Equity (ttm): -70.25% Forward P/E: 1,283.25
Tilray’s shares were listed at the price of $17, a number to which the stock might never ever come back again. From the start of public trading until its absolute peak in price only two months later, the price of TLRY gained a whopping 1,190 percent. Since then TLRY has retraced by over 60 percent when calculated from the highest closing price. Counting from the start of this year, TLRY is down about 18 percent but still in the green by almost 150 percent since its listing last year.
One problem with parabolic rises like the one TLRY underwent is that it’s hard to identify potential support and resistance zones. Right now, the price seems to be in a free fall since the major support at $64 was broken.
If the next clear support zone at $35 were to be retested again, the price could see a further decline of 37 percent. However, the RSI indicator on the Daily chart is already diving deep into oversold conditions, which might signal a forthcoming change of Tilray’s downward momentum.
Market Cap: 7.8 Billion CAD
Exchange: TSX / NASDAQ
Cronos is a licensed grower of medicinal marijuana and is based in Toronto, CA. Besides the cultivation of cannabis plants, it is also manufacturing and selling cannabis oil. The company’s production volume per annum is estimated to be somewhere around 115,000 kg, which places it at the lower end in terms of raw output when compared to its competitors.
Cronos landed some crucial deals with giants from neighboring industries such as the tobacco giant Altria, who invested $1.8 Billion in the company, taking a 45 percent stake of its equity. Altria is one of the world’s largest producers of cigarettes and owner of the cigarette brand Marlboro. As a result of this investment, Cronos now has the funds to execute its long-term business plans. In addition, Altria is an excellent partner when it comes to building a brand in the adult consumables market.
Revenue: 15,703,000 CAD EPS, diluted (ttm): -0.11
Return on Equity (ttm): -12.89% Forward P/E: 286.88
The CRON chart has known only one direction until now, and that is upwards. Consecutively forming higher high after higher high, the Cronos stock is in a clear uptrend, leaving early investors with significant profits regarding the overall growth of over 1,400 percent from the day of listing to its all-time-high.
This year’s price of CRON is up 120 percent while over the past 12 months it made three-figure gains of about 590 percent. Current price movement shows a consolidation at the resistance of $23 and CRON may be about to retest the previous high of $13. After all, any asset with such a steep rise upwards will eventually reach territory that is considered overpriced by trades and investors alike. If the price of CRON will fall through the $13 support, the next key thresholds are located at $10 and $5.50.
The Green Organic Dutchman
Market Cap: 1.1 Billion CAD
The Green Organic Dutchman is a cannabis cultivator based in Mississauga, CA, and tries to differentiate itself from the competition by growing only 100 percent organic cannabis. Investors seemed to have found potential in this approach to cannabis cultivation as the company raised over CAD$115 million in its IPO in May, 2018. The Green Dutchman is the largest licensed producer of fully organic marijuana in Canada and expects to gather 65,000 kg of dried cannabis by the end of 2019. In the latter part of 2020, the planned growing capacity of TGOD may reach 200,000 kg.
Future plans of TGOD anticipate the potential boom of the cannabis edibles market, as the company announced that its going to use part of its annual cannabis yield to research and create cannabis edibles and beverages. For this endeavour it entered a distribution partnership with Philippe Dandurand Wines, a household name in Canada’s wine industry.
Revenue: 1,879,000 CAD EPS, diluted (ttm): -0.205
Return on Equity (ttm): -18.42% Forward P/E: 29.87
Since its listing in May 2018, the TGOD stock is up about 17 percent while making well over 60 percent of its gains since the start of this year. In the latter part of 2018, the price fell into a downtrend, losing 75 percent of its value, but has since been recovering through a strong trend reversal. The price got rejected when trying to break the strong $5 resistance for the first time this year.
The RSI’s on the daily and weekly time frames certainly have room left for the price to follow through and make another attempt at breaking the $5 resistance. Right now it is crucial for the price to make a higher low in order to signal a healthy upwards momentum.
Green Thumb Industries
Market Cap: 4 Billion CAD
Aimed towards the American cannabis market, Green Thumb Industries is a Canadian cannabis grower operating in 11 U.S. states, of which 3 previously legalised marijuana for recreational purposes. Beyond cannabis cultivation, the company also runs its own licensed retail stores while holding many more licenses for the potential of future store openings.
Although Green Thumb is, together with the stock GTII, one of the lesser known names in the industry, the company can still be regarded as serious competition to other Canadian growers and distributors. That is because it is positioned fairly strong in the U.S. cannabis market, which currently is the largest market for legal marijuana worldwide.
Green Thumb Industries operates over a dozen production facilities and owns 17 retail stores that carry the brand name SHINE. Through managing its own stores, growing facilities, cannabis brands and distribution, Green Thumb is controlling every aspect of the supply chain itself, giving it a key advantage and differentiation towards competitors. With the right strategy and management, Green Thumb Industries has the necessary means for growth. In addition, it is in the pole position to expand its business to other U.S. states as legalisation will most likely continue to spread throughout the country.
Revenue: 62,493,000 CAD EPS, diluted (ttm): -0.05
Return on Equity (ttm): 8.00% Price / Earnings (ttm): N/A
Traders who bought GTII at the start of the year are now happily raking in profits as the price jumped upwards by about 80 percent since January. Since the listing of the stock in June 2018, its value increased by over 130 percent. However, when comparing the GTII chart to the one of The Green Organic Dutchman, they look very similar. GTII, too, experienced quite a sell-off after reaching its peak of $32 in September last year. Since then, the stock made a comeback, forming a solid uptrend while being able to break every resistance on its way up.
The trend at hand is crystal clear and the price is decisively moving towards regions that may capture the attention of investors, of which some will dare to start hoping for a new all-time high. In order for the stock to hit that benchmark, it would have to climb another 60 percent.
Market Cap: $2.5 Billion CAD
Exchange: TSX / NYSE
The next contender on the list of Canadian marijuana cultivators is Aphria Inc. Its annual peak production volume is about 250,000 kg, which is nothing to sneeze at. Although in recent times, bad news surrounded the company’s management as it had to fend off allegations of internal fraud. Nonetheless, Aphria landed a partnership with Southern Glazer’s, North America’s largest wine distributor and its yearly cannabis output secures the company a spot among Canada’s top 3 growers in terms of yield volume.
On top of that, Aphria succeeded at setting foot in one of the biggest medical cannabis markets, which is Europe and especially Germany, all through the acquisition of the company CC Pharma, a leading pharmaceutical distributor.
Aphria has big plans when it comes to entering the cannabis edibles market. With regulations still being in the making, the market has yet to be conquered and will, without a doubt, bear very lucrative opportunities. By being well positioned internationally and through maintaining and expanding its growing capacities, Aphria seems to be set up for the future and certainly is one of the bigger players in its industry.
Revenue: 36,917,000 CAD EPS, diluted (ttm): -0.16
Return on Equity (ttm): -3.03% Forward P/E: 24.33
APHA finished the previous year with a massive sell-off, as did the aforementioned cannabis stocks. However, in the case of Aphria, the decline in price was undoubtedly fueled by the allegations concerning a potential fraud scheme, causing the stock to take a loss of over 75 percent in 3 months. Since then, the price managed to recover and is up over 60 percent since the start of the year while gaining a little over 20 percent in the the last 12 months.
Said sell-off led to a retest of the support zone at $3.50. As of now, the price is fighting to break the $10 to $11 resistance. In case of a bearish rejection, the next big support area is located at $6 which is an important level for APHA to hold so it can form a higher low. Because with the stock making a lower low, the likelihood of the start of a major downtrend increases tremendously and APHA would be in danger of drifting into even lower price regions.
CannTrust Holdings Inc.
Symbol: TRST / CTST
Market Cap: 1 Billion CAD
Exchange: TSX / NYSE
Don’t be be mislead by the name, CannTrust Holdings is a full-on licensed cannabis grower, not just a shareholding company. However, what is special about CannTrust, is that the company focuses mainly on outdoor growing. As stated by its CEO Peter Aceto, the company is looking to invest heavily into expanding its area of cultivable land in British Columbia.
With an annual output of about 50,000 kg, CannTrust’s production capacity is nothing to sneeze at, but at the same time no competition for the likes of Aurora and Canopy. In terms of partnerships, CannTrust was able to land deals with two notable companies. One being Breakthru Beverage Group, a leading wine distributor, and the other one being National Access Cannabis.
Through these partnerships, CannTrust is able to serve the demand for medical cannabis products internationally in countries such as Australia and Denmark. Though its current yield capacity might be relatively small, its plans for fast expansion in terms of cultivation space might quickly boost it upwards in the ranking of cannabis producers. In the end, it all comes down to execution if CannTrust wants to grab its share of the global cannabis market.
Revenue: 45,645,000 CAD EPS, diluted (ttm): -0.14
Return on Equity (ttm): -11.07% Forward P/E: 31.66
As can be observed on other cannabis stock charts, e.g. Aurora (ACB), the most recent price development of CannaTrust’s stock shows an equilibrium. Bouncing back and forth between the $4 support and the $11 ranges, CTST is wandering sideways and has been unable to form any new highs or lows. However, the drastic increase in trading volume may indicate that the market will soon make a decision on CTST’s future direction.
Since January of 2019, the stock is up in price by 50 percent, the same amount which it gained when purchased 12 months ago. As the volume rises, so does the tension which the equilibrium is building up. Traders will watch closely to which side the price of CannaTrust’s share is going to break through.
Source for fundamentals: Yahoo! Finance
This article is updated regularly.