SmallCapPower Article The Canadian cannabis stocks and CBD companies we have identified have seen an average return of +7.9% over the past week
SmallCapPower | November 7, 2019: Canadian licensed cannabis producers continued to see more selling action into the beginning of November. As a benchmark, the Horizons Marijuana Life Sciences Index (TSX:HMMJ) is down 12% over the past 30 days and down 55% from its 2019 high of $23.65 on March 19, 2019. As we move into the legalization of edibles (Cannabis 2.0), we could likely see some strong leaders in the cannabis space forming. Today we have weeded out four Canadian cannabis stocks that have gone against the trend and have seen share price appreciation over the past week.
*Share price data as at November 5, 2019, data obtained from S&P Capital IQ
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Village Farms International, Inc. (TSX:VFF) – $11.33
Cannabis
Village Farms International is a vertically-integrated greenhouse grower in North America. The Company use hydroponic growing methods in glass-enclosed facilities to grow its premium-quality products. Currently, the Company has six greenhouses that cover a total of 9.2M sq.ft. As well, the Company has entered into the cannabis space with its joint ventures (JV) with Emerald Health Therapeutics and Nature Crisp LLC to create “Pure Sunfarms Corporation” and “Village Fields Hemp USA LLC,” respectively. On August 12, 2019, the Company reported Q2/19 financial results, highlighted by a 125% increase in sales of dried cannabis to $32.4M when compared to Q2/18. On October 22, 2019, VFF completed its $28M bought deal at $9.40/share. Village Farms is expected to announce its Q3/19 financial results on or about November 14. Analysts are estimating EPS of $0.17 on revenue of $59M.
- Market Cap: $593.7M
- 5-Day Return: +9.6%
- 30-Day Return: -6.7%
- YTD-Return: +156.3%
- 30-Day Average Trading Volume: 625,000
MediPharm Labs Corp. (TSX:LABS) – $4.92
Cannabis
MediPharm is a specialized, research-driven extraction company that has operations that focus on a downstream extraction methodology, distillation, and cannabinoid isolation and purification. On October 7, 2019, MediPharm announced a private-label sales agreement with ADREXpharma GmbH for the bulk export of wholesale resin to Germany. In addition, LABS signed a supply agreement with TerrAscend Corp. (CSE:TER) for a potential of up to $192M in bulk cannabis resin over a three-year period. MediPharm Labs is expected to report Q3/19 financial results on Tuesday, November 12, 2019, before markets open. Analysts are anticipating revenue to be ~$42M for the quarter.
- Market Cap: $642.8M
- 5-Day Return: +7.7%
- 30-Day Return: +29.1%
- YTD-Return: +182.8%
- 30-Day Average Trading Volume: 1,005,190
The Alkaline Water Company Inc. (TSXV:WTER) – $1.88
Cannabis
The Alkaline Water Company is a producer of premium bottled alkaline drinking water sold under the brand name Alkaline88®. With its innovative, state-of-the-art proprietary electrolysis process, the Company produces healthy, all-natural and great-tasting alkaline water for a balanced lifestyle. On August 8, 2019, Alkaline reported Q1/20 financial results, highlighted by revenue of $10.2M, an increase of 28.8% YoY, and gross profit of $4.1M with gross margins at 41%. WTER is expected to report Q3/19 financial results on November 13, 2019, before markets open. Analysts are expecting ~$12M in revenue for the quarter.
- Market Cap: $83.4M
- 5-Day Return: +7.4%
- 30-Day Return: -6.0%
- YTD-Return: -54.6%
- 30-Day Average Trading Volume: 10,770
Valens GroWorks Corp. (TSXV:VGW) – $2.87
Cannabis
Valens GroWorks is a pure-play cannabis extraction company with 425,000 kg of extraction capacity. Valens has signed extraction agreements with: Organigram, Tilray, Canopy Growth, and HEXO Corp. Valens also has a strategic partnership with ThermoFisher Scientific, one of the world’s leading manufacturers of lab equipment, in addition to an ISO 17025 labs accreditation, which allows the Company to conduct standardized testing for over 400 different metals, pesticides, terpenes, residual solvents, microbials, and cannabinoid profiles. On October 15, 2019, VGW announced strong FQ3/19 financial results, highlighted by revenue of $16.5M, adj. EBITDA of $9.8M, and net income of $5.9M.
- Market Cap: $354.7M
- 5-Day Return: +6.7%
- 30-Day Return: -6.2%
- YTD-Return: +90.1%
- 30-Day Average Trading Volume: 378,580
