The Canadian cannabis stocks on our list have reached new heights following the late 2018 sector selloff.
SmallCapPower | January 31, 2018: The cannabis market went on a bull run in August 2018, following Constellation Brands’ (NYSE:STZ) $5B investment in Canopy Growth Corporation (TSX:WEED). As a result, many cannabis companies reached all-time highs in October 2018. Since the market peak on October 15, 2018, returns have been lackluster. However, some companies have managed to surpass their October peaks with continued catalysts that have spurred new growth. Today we have weeded out three Canadian cannabis stocks that have yielded impressive returns following the December sector selloff.
*Share prices as at close January 29, 2018, data obtained from S&P Capital IQ
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Cannabis
Cronos Group operates two wholly-owned Canadian licensed producers, Peace Naturals and Original BC. The Company has international production and distribution across five continents. Cronos Group intends to continue to rapidly expand its global footprint as it focuses on building an international iconic brand portfolio and developing disruptive intellectual property. On December 7, 2018, Cronos Group announced that it received a $2.5B investment from Altria Group (NYSE:MO), which is the cigarette maker behind Marlboro. On January 23, 2019, Cronos Group announced it had received a $65M credit facility from CIBC and BMO.
- 60-Day Return: 102.4%
- 1-Year Return: 167.2%
- Market Cap: $4,298.2 million
Cannabis
Westleaf is focused on cultivation, production and extraction of cannabis, which began trading on January 9, 2019. The Company is rolling out a retail store footprint called Prairie Records, which aims to merge the tie between recreational cannabis and music to redefine the purchasing experience. Stores are planned for British Columbia, Alberta, Saskatchewan, and potentially Ontario. WL is targeting to open between 20-30 retail stores over the next 12 to 24 months. On December 4, 2018, the Company closed a $20M private placement, with all of the financing coming from Tilray Inc (NASDAQ:TLRY). On January 28, 2019, Westleaf announced it had acquired a 50% interest in the Delta West extraction facility from Delta 9 (TSXV:NINE), which is a planned a 60,000 sq. ft facility, including R&D, processing, extraction, and fulfillment. Currently Phase I construction of ~15,000 sq. ft has begun and is expected to be completed and operational by the summer of 2019, with the remaining 45,000 sq. ft to be operational by 2020.
- Return Since RTO (Jan 9, 2019): 102.1%
- Market Cap: $419.5 million
Cannabis Technologies
CannaOne Technologies has developed BloomKit, a cloud-based B2C solution for the cannabis industry, that began trading on November 21, 2018. The platform offers online storefronts, customer acquisition tools, logistics, payment processing, marketing, and search engine optimization (SEO). BloomKit will collect, store, and sort all the data created by users. With machine learning, the Company will provide BloomKit users with value-added services such as detailed industry business intelligence and predictive analytics.
- Return Since IPO (Nov 21, 2018): 104.3%
- Market Cap: $27.8 million
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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