These three small-cap marijuana stocks are cashing in on cannabis
Cannabis culture is quickly growing out of its stoner youth mentality and becoming more of a health market trend. But the market still needs to grow to meet the expectations for those consumers who do not necessarily see cannabis as strictly medicine.
West Hollywood had the right idea when they built trendy cannabis lounges, but there are still too few marijuana stocks honing in on the modern consumer. For investors looking for a list of pot stocks focused on this branch of the market, take a look at the three cannabis companies right here. These small-cap pot stocks are a few of the first to cash in on the evolution of cannabis culture.
Rubicon Organics focuses on niche consumers
Rubicon Organics (CSE:ROMJ) (OTCQX:ROMJF), which just started trading on the CSE in October, focuses on a signature organic product with licensed facilities in British Columbia capable of producing over 15,000kg of cannabis per year. This level of production is not as sizeable as some, but Rubicon is not seeking competition with the behemoths of this industry. The company is less worried about capacity and choosing instead to focus on quality.
Rubicon is building a company around a very specific kind of consumer with specific set of expectations. In an interview with Bryan McGovern at the Lift & Co Expo this year, Rubicon CEO Jesse McConnell described the specific client to which his company is catering.
“What we’ve tried to do is focus on what I’m calling the ‘super premium’ segment, which is not the ‘ultra-premium’ segment. It is the affordable premium segment,” he said in the interview.
To McConnell and the Rubicon brand, this segment of consumers sees cannabis as a part of their identity. He anticipates that this niche will continue to use flower despite popular trends for oils, edibles, and other creative cannabis products. More importantly, the pot stock is betting that consumers like these will be willing to pay more for higher-quality, organic cannabis.
According to the company’s investor presentation, nearly half of Canadians prefer organic marijuana and are willing to pay eighty percent more for it. Whether or not these projections ring true after the next couple of months, one thing is certain - cannabis consumers are having more of a sway than earlier valuations considered. Kilograms may end up ruling the industry for a while, but the niche demand for higher quality product from licensed producers could be what turns into actual profits.
Supreme Cannabis continues to make headlines this week
The pot stock kicked off the week by starting their trade on the TSX, but Supreme Cannabis Company (TSXV:FIRE) (OTCQX:SPRWF) has been hustling to make headlines since the end of last year. Celebrity endorsements, construction updates, and recent approval by Health Canada for cultivation expansion are all just a month in the life of this cannabis company.
Why should investors care about Supreme’s headlines? Even with the new expansion, Supreme Cannabis will only be capable of producing 50,000kg per year. That number may be nothing to scoff at, but it does not hold a candle to the other sizeable competitors in the market. Instead, investors should be looking at Supreme Cannabis for their marketability.
The Supreme Cannabis Company has their finger on the pulse of modern cannabis culture. Recent celebrity partnerships with Wiz Khalifa show that this cannabis stock is less focused on capacity and more focused on the kind of products and personality that go along with this industry. Like Rubicon, Supreme is looking for the consumer who sees cannabis as a lifestyle rather than a medicine.
Last year, Pot Network speculated that Supreme Cannabis could be a victim of the too-little-too-late symptoms that happen to some of the smaller cannabis companies. But this small-cap pot stock is not focused on size. Catering to a niche may be exactly what it takes to stand out in an industry that is replete with thousands of square footage but very few lifestyle brands.
Future Farm Technologies is ready to sell two million hemp seeds
Future Farm Technologies Inc. (CSE:FFT) (OTCQB:FFRMF) is looking at both quality and safety when it comes to their CBD products. Last month, the pot stock announced that the company is putting systems in place to sell close to two million Cherry Wine hemp seeds that were harvested last year at their cultivation center in Maine.
Cherry Wine hemp is a particularly potent breed of flower, boasting a 19 percent concentration of CBD versus a virtually nonexistent concentration of THC. According to Leafly, the strain is valued for not only its medicinal effects but also its flavor. The terpenes are very high in this particular strain, making it a preference for consumers familiar with the cannabis and hemp plants but not looking to get high.
On top of their hemp seeds, Future Farm simultaneously announced the completion of their new ethanol extraction equipment. The equipment still has a few tests to undergo, but according to the press release, Future Farms will be using it to convert 20,000lbs of hemp biomass into CBD oil fit for sale once ready.
Ethanol extraction offers up a safe alternative to traditional butane extraction methods. It creates oils that are free of solvents and therefore safer for human consumption. Combine this with their niche strain of hemp, and this pot stock is ready to take on a specific kind of consumer.
Again, it is not the numbers that set these small-cap pot stocks apart from the competition. What Future Farm, Supreme Cannabis, and Rubicon truly have going for them is their ability to hone in on a key demographic in this large - and still growing - industry. Picking out a consumer and building a brand around them could be one of the few ways to keep up with the evolution of commercial cannabis. And for investors looking to diversify their portfolio, it could be these smaller guys that bring in the profits.