As Canada continues on the path to become the first developed country to legalize marijuana for recreational adult use, the country’s major growers are racing to keep in step with what is anticipated to be great demand. Acquisitions, partnerships, supply agreements and expansion plans have kept the Canadian industry buzzing, but, which marijuana stocks among them offer the highest production potential and/or delivery capacity for the coming year?
Here are the top five Canadian marijuana stocks producers for investors to consider:
1) Weed stocks company Aurora Cannabis (NASDAQOTH: ACBFF): 240,000 – 270,000 kilograms
In the company’s operating results for the second quarter, it reported an expectation of 240,000 to 270,000 kg of dried marijuana production capacity as of 2019.
Aurora is largely dependent upon two of its facilities for this production. The first, Aurora Sky, will be a highly automated 800,000 square foot facility with the ability to surpass 100,000 kg of annual dried cannabis production. The facility is slated for completion mid 2018 and may prove to be one of the world’s most efficient facilities.
The second major production source involves Aurora’s Denmark partnership with Alfred Pedersen & Son, known as Aurora Nordic. Even larger than Aurora Sky, this facility will span 1 million square feet and a minimum annual production capacity of 120,000 kg of dried cannabis.
To top everything off, Aurora Cannabis acquired CanniMed Therapeutics in what became the priciest industry buyout to date, adding 19,000 kg to its production capacity. Aurora’s remaining facilities (Aurora Mountain, Aurora Vie and Lachute) are expected to add 4,000 to 4,800 kg annually.
2) Marijuana stocks company Aphria (NASDAQOTH: APHQF): 230,500 kilograms
Aphria is a great candidate for weed stocks to invest in as it comes in close behind Aurora Cannabis per the company’s admission of an expected 2019 yield of 230,000 kg of cannabis. This estimate may turn out to be conservative.
The company’s four-phase flagship project, slated for completion next January, will span more than 1 million square feet with production capabilities of 100,000 kg of cannabis annually. A noteworthy observation is the number of times Aphria has increased its production forecast thus far which, in turn, may well lead to the company exceeding its 100,000 kg mark once the project is complete.
In addition to its flagship, Aphria’s partnership with Double Diamond Farms, initiated in January, will add 120,000 kg of cannabis to its annual supply. Aphria’s original plan was to construct a new site on 100 acres which wouldn’t be finished until 2020. The partnership with Double Diamond Farms was Aphria’s strategic compromise as it would allow the company to increase its capacity more than double and shave a year off in the process.
Aphria’s announcement in January of its acquisition of Broken Coast Cannabis is expected to bump its annual output by 10,500 kg, bringing the company’s total to a conservative 230,500 kg.
3) Less conventional weed stocks company Cannabis Wheaton Income Corp. (NASDAQOTH: CBWTF): 230,000 kilograms
Cannabis Wheaton Income Corp is not a traditional grower, but, rather, a royalty-based company, supplying growers with necessary capital for expansion in exchange for a percentage of each grower’s produce at well below market rates. The company turns around and sells this cannabis at market rates, earning profits as it pockets the difference.
Cannabis Wheaton is currently set up with a diverse portfolio of around 15 deals, allowing it to reach a wider geographic population in Canada. The company’s diversity of delivery and product also acts as a potential numerical buffer if any of its licensed producers are struggling to deliver the amount of intended cannabis.
Cannabis Wheaton’s management team has stated the company is par for the course to sell 230,000 kg of dried marijuana in the next year. This number, of course, is pending all partners’ projects are on track and on budget with Cannabis Wheaton facing no foreseeable problems selling whatever product it receives. The royalty model may be highly capital-intensive on the outset, but, its potential for long term profit may well tip the scales making this a promising option for marijuana stocks to invest in.
4) Great marijuana stocks to buy now include MedReleaf (NASDAQOTH: MEDFF): 140,000 kilograms
MedReleaf, based out of Ontario, only went public last year, and, initially, was only focused on building a new 210,000 square foot facility in Bradford. However, between the Bradford facility and its Markham facility, MedReleaf’s total output was only 35,000 kg per year. This number would not suffice in the escalating market competition, so, the company announced in February its acquisition of 164 acres in Ontario. An existing greenhouse, Exeter Facility, takes up 69 of these acres, which the company plans to retrofit for cannabis harvesting with the expectation of adding 105,000 kg of annual cannabis production.
The remaining 95 acres can accommodate future greenhouse facility construction. According to MedReleaf’s estimations, this acreage could house a facility with minimum capacity of 150,000 kg of cannabis annually, adding MedReleaf to the list of major players of weed stocks to invest in.
5) Marijuana stocks Canopy Growth Corp. (NASDAQOTH: TWMJF): approximately 300,000 kilograms
The last of these marijuana stocks, largest by market cap, is the wildcard of the bunch when it comes to production output. The reason behind this is simple: Canopy Growth management has remained tight-lipped on its reports of annual production capacity, not even providing Wall Street with production guidance. Therefore, no one actually knows Canopy Growth’s production numbers, though we can wager an educated guess based on what we do know.
To date, Canopy Growth has seven facilities, either acquired or constructed organically; among them, they have a total of 665,000 square feet of growing capacity. According to operating results from Canopy Growth’s third quarter, the company is also in the throes of constructing 3.4 million square feet of greenhouse facilities in British Columbia. No timeline for completion has been clearly stated, but, it’s reasonable to estimate this product ready for market in 2019. However, even with a conservative formula, (anticipating a yield of 100,000 kg for every 1 million square feet), it’s easy to estimate Canopy Growth’s 2019 production around 300,000 kg.
(For more investor tips, read Could These Marijuana Stocks Be a Good Long-Term Investment?)