Canada is on track to legalize the recreational use of marijuana in July 2018. Although recreational marijuana use is not legal across the country just yet, a number of marijuana growers are already seeing impressive profits. Now is the time to consider marijuana stock to buy, especially in the Canadian market.
In February 2018, Aurora Cannabis (NASDAQOTH: ACBFF) reported impressive revenue growth for the end of 2017.
This makes marijuana stocks, and especially Aurora, among those to watch. Aurora is not the only marijuana company posting profits. Canopy Growth (NASDAQOTH: TWMJF) also reported tremendous growth. Canopy Growth announced its third-quarter results for its fiscal year 2018 earlier in February. Savvy investors know to look to marijuana stocks to invest in.
In this article, we will talk about the ten reasons you should consider when looking at marijuana stocks in Canada.
- Canopy Growth posted a revenue of CA21.7 million, an all-time high for the company. This number reflects the massive year-to-year jump of 123% that Canopy Growth experienced. Canopy Growth’s sales were a record 2,330 kilograms (approximately 5137 pounds), at an average sales price of CA$8.30 per gram.
- Canopy Growth’s posted a total revenue of CA$1 million in sales of medical marijuana in Germany, and all of the product was grown in Canada. Canopy Growth has expanded into international markets, and Germany is one of the industry’s biggest opportunities. This gives some insight into the potential for marijuana stocks in 2018.
- Sales of cannabis oil products, including soft gel capsules, tend to be more lucrative than other cannabis products. This is one reason why Canopy Growth’s update that 23% of its total product revenue in the third quarter came from oil products. This was great news for individuals looking for marijuana stocks to invest in. In the prior-year period, only 13% of Canopy Growth’s total revenue came from oil product sales, showing that the company is growing and adapting to market demand.
- Canopy Growth’s posted net income was CA$11 million. This number reflects a year-over-year increase of a whopping 267%. Canopy Growth’s net income also included a positive impact of non-cash fair value changes on financial assets of $35.8 million. However, Canopy Growth posted an operating loss of CA$26 million in the third quarter.
- Canopy Growth’s weighted average cost per gram to point of harvest in the third quarter decreased 18% from the second quarter of fiscal 2018. This weighted average cost of CA$0.59 was the sixth consecutive quarter below CA$1 per gram. Weighted average cost per gram before shipping and fulfillment also decreased 18% quarter over quarter to CA$1.03. These figures give investors insight into the trends that marijuana stocks in Canada might face.
- Canopy Growth’s reported inventory and biological assets at the end of the third quarter were a record high of CA$108.3 million. This demonstrates that Canopy Growth is preparing for the increase in product demand once Canada legalizes recreational marijuana, which will undoubtedly positively influence the price and future of marijuana stocks in 2018.
- Canopy Growth has 10 licensed facilities across the world, including a production license in Denmark and a provisional production license in Jamaica. The company is clearly positioning itself to be a leader in the international cannabis market, making it a good purchase in marijuana stock.
- Canopy Growth now has four retail license locations in Newfoundland and Labrador, the first privately owned legal cannabis retail locations in Canada, making it a good marijuana stock to invest in.
- According to reports, Canopy Growth had CA$400 million in cash on hand to fund expansion efforts in Canada, and internationally as of December 31, 2017.
- Canopy Growth had over 182 million outstanding shares at the end of 2017–nearly 56% higher than the number of shares it had at the end of 2016. This increase in shares helped Canopy Growth raise cash to use for expansions.
Aurora Cannabis and Canopy Growth have bright futures–and we are not just blowing smoke. This is a great time to identify marijuana stocks to invest in, as the Canadian legal marijuana market is predicted to grow substantially.