A Quick Review of 7 Cannabis Stocks Cultivating An Unbelievable Amount of Green

0
644

With Canada’s expected legalization of recreational marijuana just around the corner, growers have been spending and working at a frenzied pace to prepare for the increase in demand. The past six months have been wrought with forging new partnerships, deal-making, greenhouse expansion projects, and a few history-making acquisitions.

In the midst of all this activity, seven marijuana businesses have emerged; these comprise a list of growers expected to deliver an abundance of 100,000 kilograms of marijuana annually once they reach full capacity.

Here’s a breakdown of marijuana growers on the list:

1. Marijuana stock Canopy Growth Corp. (NASDAQOTH:TWMJF) expects a marijuana supply of 500,000 kilograms.

For awhile, Canopy has been voted the mostly likely of pot stocks to produce the highest annual yields of cannabis. Though the company hasn’t offered much in the way of annual production figures or the expected completion date of its British Columbia greenhouse facilities, it recently announced having received Health Canada approvals for cultivation licenses. These approved licenses triple Canopy’s growing space, bumping it to 2.4 million square feet.

Estimations are, however, that Canopy Growth’s growing space will ultimately be around 5.7 million square feet and allow for annual production up to 500,000 kilograms. The company also boasts a distribution channel superior to other competitors, including online sales, physical retail shops, and strategic partnerships [e.g., Constellation Brands (NYSE:STZ) among them], putting them in a position to lead the sector.

2. Marijuana stock Aurora Cannabis (NASDAQOTH:ACBFF) expects a marijuana supply of 430,000+ kilograms.

Aurora Cannabis is keeping a fairly close step with Canopy Growth, having expanded in all capacities this year, and is tracking to deliver fully funded capacity of at least 430,000 kilograms.

For starters, the company’s organic greenhouse project, Aurora Sky, will yield an excess of 100,000 kilograms of annual dried marijuana and cover a space of 800,000 square feet. Also in the works is a partnered project in Denmark, Aurora Nordic, with expected annual delivery of 120,000 kilograms of dried cannabis. Aurora made marijuana stock history in March when it closed on its acquisition of CanniMed Therapeutics (OTC:CMMDF), now known as the most expensive industry acquisition to date. Aurora’s most recent announcement is in regard to a deal struck to build a facility in Medicine Hat, Alberta, spanning 1.2 million square feet and boasting production capacity of 150,000 annual kilograms.

When it comes to acquisitions and expansions, arguably no marijuana stock can beat Aurora Cannabis’ aggressive approach this past year.

3. Marijuana stock Aphria (NASDAQOTH:APHQF) expects a marijuana supply of 230,000 kilograms.

Next in line in terms of production capacity is Aphria, with an expected annual delivery of 230,000 kilograms of fully funded cannabis, distributed largely between three projects. The first is Aphria One, a project with four phases costing an excess of $100 million, expected to generate 100,000 annual kilograms of cannabis. Next is Aphria Diamond, in partnership with Double Diamond Farms, expected to yield an annual 120,000 kilograms. The third project and remainder of expected yield is the company’s acquisition, Broken Coast Cannabis.

Similar to Canopy, Aphria has built up a distribution network that is impressive and bound to be effective. Through several pre-existing export deals and its Nuuvera acquisition, number two on the list of priciest deals in the marijuana industry, the company’s global market expanded to 12 countries.

4. Marijuana stock MedReleaf (NASDAQOTH:MEDFF) expects 140,000 kilograms of marijuana supply.

MedReleaf has also been rising among the ranks of marijuana stocks in terms of increasing annual yield. Before the year began, the company’s targeted full capacity was only around 35,000 kilograms. This figure included MedReleaf’s two facilities, Markham and its expansion at Bradford, which would more than quadruple the company’s grow space.

It wasn’t until the end of February, when MedReleaf acquired 164 acres of land in Ontario, that it became a real contender. Sixty-nine acres of the property already housed a greenhouse facility called Exeter, which is now slated for retrofitting in order to produce marijuana. MedReleaf gained a financial advantage, as well as time, by acquiring and retrofitting an existing facility instead of building from the ground up. Once the Exeter retrofit is complete, the facility will yield around 105,000 annual kilograms and push the company’s overall capacity to 140,000 kilograms per year.

5. Marijuana stock OrganiGram Holdings (NASDAQOTH:OGRMF) expects 113,000 kilograms of marijuana supply.

Organigram Holdings could win a prize for the biggest industry surprise this year, thanks to its considerable boost in annual production capacity. Initially, the company forecasted its peak yearly yield around 65,000 kilograms; in the course of this year, however, that has been raised to 113,000 kilograms once the company reaches full capacity. The change boils primarily down to this: the company’s crop yield far surpassed its estimates.

Another thing that sets Organigram apart from its competitors is that its crop growth all happens at a single site, in Moncton, New Brunswick. This brilliant tactic has worked well for the company, allowing it to keep costs lower than usual. Lower operating costs, paired with an increased focus on higher-margin cannabis oils, has given this marijuana stock a reputation as the singular “marijuana value stock.”

6. Marijuana stock Hydropothecary Corp. (NASDAQOTH:HYYDF) expects a marijuana supply of 108,000 kilograms.

Hydropothecary Corp., a cannabis grower based in Quebec, remained in the shadows for a long time and has only emerged on the big-player stage these past few months. The company added 78 acres of property to its existing 65-acre Quebec facility in December. On this land, Hydropothecary will build a greenhouse spanning 1 million square feet, a project that will bump growing capacity to a combined 1.3 million square feet. All together, the project will set Hydropothecary up to deliver around 108,000 annual kilograms of dried marijuana at full capacity.

An even larger boost and incentive to up its production ante came when Hydropothecary recently secured Canada’s largest supply deal to date. The deal sets Hydropothecary up as Quebec’s main cannabis supplier for five years, with a total 200,000 kilograms of dried cannabis. The deal is tentative on the fourth and fifth years of production, but that has not dampened the confidence of the company’s management team, who forecast demand increase in the double digit percentages.

7. Marijuana stock Cannabis Wheaton Income Corp. (NASDAQOTH:CBWTF) expects 230,000 kilograms of marijuana supply.

Last on the list, but certainly not least, is the marijuana royalty stock, Cannabis Wheaton Income Corp. Cannabis Wheaton is not listed in the descending order of expected annual production, as are the other marijuana businesses, owing to the fact that it is not a traditional cannabis grower. The company’s royalty model, in fact, makes it function more as a middleman in the industry. Cannabis Wheaton’s role is to provide growers who are seeking to expand with the necessary capital upfront; in exchange, it claims a percentage of the grower’s production at rates that are well below market value. This allows Cannabis Wheaton to turn a profit by selling the product at market rates.

Per company estimates, Cannabis Wheaton has already secured licensing deals with more than a dozen growers. The company claims a 60% minimum internal rate of return on its deals, with the expectation of receiving and selling 230,000 kilograms of cannabis produce annually through its licensed partners.

(For related information, read This Virtually Unknown Weed Stock Just Landed the Largest Supply Agreement in Canada.)

LEAVE A REPLY

Please enter your comment!
Please enter your name here