GOOD REVIEWWHAT ARE WE LOOKING FOR? Cannabis producers that are of sound investment quality and have reasonable valuations. THE SCREEN Canadas fast-approaching legalization of recreational cannabis, not to mention the recently skyrocketing shares of Tilray Inc., continues to spur investor interest. Our search targeted established Canadian producers with sound prospects. We then applied our Cannabis Quality Ratings (CQR), explained below. STORY CONTINUES BELOW ADVERTISEMENT We found a number of firms that offer investment quality. Not surprisingly, reasonable valuations were nowhere to be found in this white-hot industry. Almost all producers need huge revenue growth to match market capitalizations. All could plunge if momentum investors flee. Conservative investors should avoid cannabis stocks. Highly aggressive investors who want to hold cannabis producers could venture into this area, but stick with the highest-quality shares possible. Our CQR system awards points to a stock based on key factors: Rising and diversified revenue;Cost-competitive production;Sound balance sheet;International operations;Industry prominence;Free from dependence on a single customer;Prominent clients or partnerships;Market cap in line with sales;Focused on organic growth, not acquisitions;Stock gains in line with market averages;Operates largely outside the intense pressure of the broker/media limelight. Our Cannabis Quality Ratings range from a 5-Leaf CQR (highest) score to a 1-Leaf CQR. Cannabis producers with most if not all of the above factors earn a 5-Leaf CQR score for their sound investment quality and reasonable valuation compared with their current price and market cap. Companies with many of these factors receive a 4-Leaf or 4.5-Leaf CQR. That means they offer reasonable investment quality, but are somewhat overvalued at their current price and market cap. Companies with a 3-Leaf or 3.5-Leaf CQR have a few of those key factors, which suggests they have reasonable investment quality. Still, they are likely overvalued at the current price and market cap. Companies with a 2-Leaf or 2.5-Leaf CQR have a number of investment flaws and are very likely overvalued at the current price and market cap. STORY CONTINUES BELOW ADVERTISEMENT Companies with a 1-Leaf or 1.5-Leaf CQR have little investment quality and are almost certainly overvalued at the current price and market cap. MORE ABOUT TSI NETWORK TSI Networkis the online home of The Successful Investor Inc. the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor. TheTSI Cannabis Investing Bulletinsis the latest. TSI Network is also affiliated with Successful Investor Wealth Management. WHAT WE FOUND Our CQR system generated eight stocks. Leaders Canopy Growth Corp. and Aphria Inc. are well-positioned across the Canadian cannabis industry and internationally. Aurora Cannabis Inc. and CannTrust Holdings Inc. are expanding on their medical marijuana expertise. Tilrays U.S. listing is fuelling outsized share-price gains. New Brunswicks Organigram Holdings Inc. and Quebecs Hexo Corp. have refocused nationally. Ontarios Emblem Corp. aims to do the same.