A PotNetwork Special Report
Marijuana stocks have had a volatile year. Even with Canada’s recent move to legalize recreational cannabis, more U.S. states enacting medical cannabis laws, and a general shift to a more favorable public opinion about the benefits of marijuana use, marijuana stocks seem to peddle back and forth on the market with no end to the instability in sight.
Still, these days, there are so many marijuana stocks from which to choose. How do investors go about making the right investment and having the right strategy? Sometimes, though not always, bigger can mean better. Here is a list of the largest marijuana stocks on the market today, in alphabetical order:
With a $1.39 billion valuation, Canadian grower Aphria Inc. (NASDAQOTH:APHQF) is poised to dominate the Canadian recreational cannabis market. Earlier this year company acquired global cannabis company Nuuvera, which sources product from around the world to manufacture medical cannabis products.
That acquisition put Aphria on the global stage in a dozen countries; the company has also entered into a strategic partnership with Double Diamond Farms and is embarking on an ambitious expansion project. Altogether, these business deals will see Aphria produce 230,000 kilograms of cannabis per year.
Aurora Cannabis Inc.
Aurora Cannabis Inc. (NASDAQOTH:ACBFF) holds the number two spot in market cap with a valuation of $3.47 billion. Like Aphria, they’ve made a significant strategic move by acquiring CanniMed Therapeutics.
In fact, it will boost Aurora’s production capacity to over 280,000 kilograms. Also, like Aphria, the company has unique growing capabilities in its Aurora Sky project and has a strategic partnership with Denmark’s Aurora Nordic project. Aurora also has state-of-the-art growing facilities that position it to likely have the lowest per-gram industry costs.
Auxly Cannabis Group
Auxly Cannabis Group (NASDAQOTH:CBWTF), which until a couple of weeks ago was known as Cannabis Wheaton, is valued at $442 million. A royalty and streaming company, they are the ninth-largest marijuana stock.
The company has indeed stepped in to fill a huge need in the market, since raising capital remains a challenge for most marijuana stocks, particularly those that are based in the U.S. Auxly provides growers and manufacturers the necessary financing to keep their businesses going or expand to the next level.
Their business model has been successful: in exchange for providing capital, the company gets a percentage of production. The best part is that they obtain it at below-market cost then sell it at the market rate and reap the profits.
CannTrust Holdings (TSX:TRST) has over 40,000 registered medical cannabis patients and is also undertaking vast expansion efforts. The 430,000 square foot Niagara Greenhouse construction is on schedule and poised to produce 40,000 kilograms per year.
CannTrust will add even more production when it adds on another 600,000 square feet of capacity. The company’s main product line is the high-margin extracts, but they also sell dried cannabis. With the expansion, their current valuation of $473 million will rise even higher.
Canopy Growth Corp.
Canopy Growth Corp. (NYSE:CGC)(TSX:WEED) is king of the castle when it comes to marijuana stocks. The global company is based in Canada and dominates the grower market with 665,000 square feet of growing space in seven state-of-the-art facilities.
Canopy is rapidly expanding by developing significant greenhouse build efforts in British Columbia. While Canopy is not so forthcoming about advertising their production capacity, industry insiders estimate it is easily 300,000 kilograms. But growing is not their only forte; the company has incredible distribution channels including brick-and-mortar storefronts and a massive online presence.
They boast Canada’s most well-known brand (Tweed) and have a very lucrative strategic partnership with beverage giant Constellation Brands, owner of Corona beer and other alcohol products. Canopy has emphasized global expansion of their medical cannabis market as well. Growing, distribution and expansion have been the trifecta win for Canopy, and that is why they are at the top with a $4.36 billion valuation.
Cronos Group (NASDAQ:CRON) investment firm recently made headlines when they jumped from the over-the-counter (OTC) exchange to the Nasdaq. It turned out to be a smart strategic move for the Canadian firm; due to the improved visibility, institutional investors have taken notice.
Cronos has a solid business, holding a 100 percent stake in cannabis growers Peace Naturals and Original BC. They also hold a 21.5 percent stake in Whistler Medical Marijuana and have several other smaller investments with multiple growers too. Canada’s legalization of recreational cannabis has driven up the company’s market cap, and Cronos Group is currently valued at $982 million.
Emerald Health Therapeutics
Emerald Health Therapeutics (NASDAQOTH:EMHTF) is another big marijuana stock with even bigger ambitions. Currently valued at $416 million, the company is already among Canada's top growers but will boost production to over 100,000 kilograms with two major building projects currently underway.
The first is the British Columbia build-out of one million square feet of growing space and new company headquarters, and the Village Farms International strategic partnership to retrofit an existing 1 million square foot tomato production facility to handle dried cannabis production instead.
GW Pharmaceuticals (NASDAQ:GWPH) made history recently by getting U.S. Food and Drug Administration (FDA) approval for its drug Epidiolex for treatment of two rare forms of childhood epilepsy--Dravet syndrome and Lennox-Gastaut syndrome. Neither disease had an FDA-approved treatment, and Epidiolex fills the bill.
The great news for GW Pharmaceuticals is that now that the drug is FDA-approved, doctors can prescribe it as off-label for other similar uses. Sales of Epidiolex are projected to top $500 million annually. The UK cannabinoid-based drug developer already makes Sativex, approved throughout Europe, so this isn’t their first rodeo. Epidiolex is only expected to make the company’s current $3 billion valuation climb even higher.
Quebec-based Hydropothecary Corp. (TSX:HEXO) is an amazing non-traditional niche medical cannabis producer. Like many other companies in this list, Hydropothecary has big expansion plans.
The company is expanding to 1.3 million square feet of land to produce over 100,000 kilograms annually for growing their premium medical marijuana strains. The company’s $500 million valuation is due in large part to these premium strains which cost double the average price-per-gram. Investors are also intrigued by the company’s product line of oils and extracts, and their unique Decarb product, a ready-to-consume marijuana powder.