So, after much ado and bloodletting, the formerly high flying cannabis space – now humbled and begging forgiveness for its second derivative sins – is ready for some browsing speculation once again. Let us be your guide – your Sherpa – as we mount an expedition for value, momentum, and fresh green profits.
Today, we take a glance at Canopy Growth Corp (NYSE:CGC), Aurora Cannabis Inc (NYSE:ACB), GD Entertainment & Technology Inc. (OTCMKTS:GDET), and Curaleaf Holdings Inc (OTCMKTS:CURLF).
Canopy Growth Corp (NYSE:CGC) engages in growing, possession, and sale of medical cannabis in Canada. Its products include dried flowers, oils and concentrates, softgel capsules, and hemps.
It’s perhaps the biggest overall name in the space when it comes to a combination of producing and investing in the space, so it has to be near the top of any measure as far as benefitting from a shift whereby full-scale legalization in the US market is concerned.
Canopy Growth Corp (NYSE:CGC) generated sales of $76.6M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter “growth” rate of -15.3% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($2.8B against $425.8M).
According to its own materials, the company offers its products under the Tweed, Black Label, Spectrum Cannabis, DNA Genetics, Leafs By Snoop, Bedrocan Canada, CraftGrow, and Foria brand names. It also offers its products through Tweed Main Street, a single online platform that enables registered patients to purchase medicinal cannabis from various producers across various brands.
In the company’s words, “Canopy Growth is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time.”
This is also one of the most geographically diversified players in the cannabis space, with operations in 12 countries across five continents.
And there has been plenty of PR work here. The Company is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the public’s understanding of cannabis, and through its partly owned subsidiary, Canopy Health Innovations, has devoted millions of dollars toward cutting edge, commercializable research and IP development. Through partly owned subsidiary Canopy Rivers Corporation, the Company is providing resources and investment to new market entrants and building a portfolio of stable investments in the sector.
One of its most important divestitures and strategic interests is Canopy Rivers Inc., a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. The company works collaboratively with Canopy Growth to identify strategic counterparties seeking financial and/or operating support.
The company has developed an investment ecosystem of complementary cannabis operating companies that represent various segments of the value chain across the emerging cannabis sector. As the portfolio continues to develop, constituents will be provided with opportunities to work with Canopy Growth and collaborate among themselves, which the company believes will maximize value for its shareholders and foster an environment of innovation, synergy and value creation for the entire ecosystem.
It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things.
Aurora Cannabis Inc (NYSE:ACB) is one of the most widely diversified players in the cannabis space due to its powerful strategic investments, and it clearly also deserves to be at or near the top of this list.
In addition, the company has demonstrated rapid organic growth and strong execution on strategic M&A, which to date includes 15 companies – MedReleaf, CanvasRX, Peloton Pharmaceutical, Aurora Deutschland (formerly Pedanios), H2 Biopharma, Urban Cultivator, BC Northern Lights, Larssen Greenhouses, CanniMed Therapeutics, Anandia Labs, HotHouse Consulting, Agropro, Borela, and the pending acquisition of ICC Labs.
We would also note that the company has invested in and established strategic partnerships with a range of leading innovators, including: The Green Organic Dutchman Holdings Ltd. (TSX: TGOD), Radient Technologies Inc. (TSXV: RTI), Hempco Food and Fiber Inc. (TSXV: HEMP), Cann Group Ltd. (ASX: CAN), Micron Waste Technologies Inc. (CSE: MWM), Choom Holdings Inc. (CSE: CHOO), Namaste Technologies Inc. (TSXV: N), Evio Beauty Group (private), Wagner Dimas (private), CTT Pharmaceuticals (OTCC: CTTH), and Alcanna Inc. (TSX: CLIQ).
However, just drilling down into its core cannabis production operations, Aurora Cannabis Enterprises Inc, trumpets itself as “one of the world’s largest and leading cannabis companies” and a licensed producer of medical cannabis pursuant to ACMPR.
We would expect expansion on the way given the inflow of investment capital. But, at present, the Company operates a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta, known as Aurora Mountain, is currently constructing a second 800,000 square foot production facility, known as “Aurora Sky”, at the Edmonton International Airport, and has acquired, and is undertaking completion of a third 40,000 square foot production facility in Pointe-Claire, Quebec, on Montreal’s West Island.
And the stock has been acting well over recent days, up something like 14% in that time.
Aurora Cannabis Inc (NYSE:ACB) managed to rope in revenues totaling $75.2M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 153.6%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($236.9M against $464.6M, respectively).
GD Entertainment & Technology Inc. (OTCMKTS:GDET) is another stock that continues to look extremely cheap relative to the strong pace being set by the company in its core strategy, especially on the CBD side.
The company recently opened a store for its CBD-based products subsidiary, The Greenery. The store, which is located at Palisades Center in West Nyack, New York, the second-largest shopping mall in the New York metropolitan area and the eighth-largest in the United States, was opened three weeks in time for Black Friday and the holiday shopping season.
Now it is coming out and already talking about expansion in that space. Specifically, according to its most recent release, the company is entertaining a tangible offer to expand its “The Greenery” (TheGreeneryCo.com) CBD products physical retail exposure to a second, and larger, mall-based physical store location following positive branding and customer traffic data for its first mall-based physical store location.
“Following an extremely positive experience at the kiosk level at Palisades Center, we have been approached by management at that location and given a priority access option to expand to an additional and larger space in another similar mall,” noted Anil Idnani, CEO of GDET. “The vast bulk of the potential market for CBD products has no idea that they need to navigate to some backwater ecommerce portal to buy CBD-based products. Instead, they are walking around popular shopping areas, browsing for something new and interesting to try – and CBD is that new and interesting possibility. The only way capture any piece of that market is to be in front of them, out in the world.”
This is spectacular reasoning, and why we felt compelled to include the stock on this list.
One other dimension that differentiates GDET in this list is diversification: it is also a fully-active and operating blockchain play. There are many potential synergies between these segments. But there is also the advantage of diversification of revenue streams, which may provide some cover if there is a further capitulatory washout in the hemp, cannabis, and CBD complex before the next leg higher in the space gets fully underway.
We would also note that the company just announced a substantial reduction in its outstanding share count to lighten the load and send a shareholder-friendly signal to the market.
“If we move forward with this second location, it will be because we have run the numbers and the store will more than pay for itself,” continued Idnani. “At this point, we believe we can be selective and expand as the right opportunities come along. But we also believe that this approach to distribution is on target for this market because we gain an edge in brand exposure that will pay priceless dividends down the road as this marketplace continues to go mainstream over coming quarters.”
Curaleaf Holdings Inc (OTCMKTS:CURLF) is a vertically integrated cannabis player that has started to move into the hemp-based CBD space in an aggressive fashion. The stock has been outperforming the broader hemp-cannabis-cbd complex in recent action, which is notable.
The company just announced that it has opened its 27th dispensary in Florida at 3631 NW Federal Highway in Jensen Beach on Friday, November 15th.
According to the release, “Curaleaf has the largest cannabis dispensary footprint in the US with 50 dispensaries across the country and continues to execute on its strategy of rapid expansion in Florida. The new 4,500 square foot location is accessible to patients from the Jensen Beach area, including the communities of Jupiter, Port St. Lucie, Stuart, Port Salerno and Palm City, and will offer a full range of premium quality medical cannabis products and private consultations by meticulously trained staff.”
Curaleaf Holdings Inc (OTCMKTS:CURLF) operates a large number of dispensaries, 12 cultivation sites and 9 processing sites with a focus on highly populated, limited license states, including Florida, Massachusetts, New Jersey and New York. Curaleaf, Inc. leverages its extensive research and development capabilities to distribute cannabis products in multiple formats with the highest standard for safety, effectiveness, consistent quality and customer care. Curaleaf is committed to being the industry’s leading resource in education and advancement through research and advocacy.
Curaleaf Inc.’s Florida operations were the first in the cannabis industry to receive the Safe Quality Food certification under the Global Food Safety Initiative, setting a new standard of excellence.
It cultivates, processes, markets, and/or dispenses a range of cannabis products in various operating markets, including flower, pre-rolls and flower pods, dry-herb vaporizer cartridges, concentrates for vaporizing, concentrates for dabbing, tinctures, lozenges, capsules, and edibles.
And the stock has been acting well over recent days, up something like 11% in that time.
“We have been hearing from patients about the need for a full-service medical cannabis center along the Martin County and St. Lucie County coast,” said Joe Lusardi, Curaleaf CEO. “Curaleaf is proud to be the first dispensary in Jensen Beach, and we look forward to serving this community.”
Curaleaf Holdings Inc (OTCMKTS:CURLF) managed to rope in revenues totaling $64.9M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 0%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($140.3M against $64.1M).