The notion that cannabis producers are now moving into ascendency once again in the stock market is not necessarily original as of last month, but parsing among the potential names doesn’t necessarily follow so easily. Growth in the sector is gawdy, as a matter of macro data extrapolation on just about any timeframe lens through which one views the scene.
The long-term growth thesis is uninterrupted. The market got ahead of itself. Investors – particularly on the retail side – got too big and too excited near the highs two years ago. That’s hardly an original observation. But now, after the bear, and into the new bull, there’s work to be done.
The new winners must be located and allocated to. With that in mind, here’s a selection of some of the most active names in the space, including: Tilray Inc (NASDAQ:TLRY), Liberty Health Sciences Inc (OTCMKTS:LHSIF), Cannabis Strategic Ventures (OTCMKTS:NUGS), Curaleaf Holdings Inc (OTCMKTS:CURLF), and Aphria Inc (NYSE:APHA).
Tilray Inc (NASDAQ:TLRY) has actually been fading again in recent weeks despite a rousing rally of as much as 250% from March to May. The debt-servicing issue is still primary here. But the company nonetheless represents a very notable name in the space given its position as the first big branded retail cannabis stock to trade on a major US exchange as a high-profile IPO.
This was probably something a bit darker that just an issue of bad time. That said, for what it’s worth, the debt-servicing issues will remain in this name for far longer than most of its comparable foes. And it’s worth noting that it has been underperforming in recent action for likely just such reasons.
Tilray Inc (NASDAQ:TLRY) engages in the research, cultivation, processing, and distribution of medical cannabis.
The company offers its products in Argentina, Australia, Canada, Chile, Croatia, Cyprus, the Czech Republic, Germany, New Zealand, and South Africa. Tilray, Inc. was incorporated in 2018 and is headquartered in Nanaimo, Canada.
One of its key subsidiaries is High Park, which was launched to produce and distribute world-class cannabis brands and products for the Canadian market. Based in Toronto and led by a team with deep experience in cannabis and global consumer brands, High Park has secured the exclusive rights to produce and distribute a broad-based portfolio of cannabis brands and products in Canada, subject to applicable laws and regulations.
In addition, High Park has developed new brands and products for the Canadian market. Upon the coming into force of federal legalization of cannabis for adult-use and corresponding provincial legislation, High Park anticipates fulfilling adult-use supply agreements and purchase orders in Quebec, Ontario, British Columbia, Manitoba, Nova Scotia, Prince Edward Island, Northwest Territories and Yukon on October 17, 2018.
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 4% in that timeframe.
Tilray Inc (NASDAQ:TLRY) managed to rope in revenues totaling $52.1M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 126.2%, as compared to year-ago data in comparable terms.
Liberty Health Sciences Inc (OTCMKTS:LHSIF) just announced that it has entered into a licensing agreement with licensed California adult use and medicinal cannabis company HONEY, one of California’s largest full service companies, to supply all of Liberty’s dispensaries with the company’s full assortment of branded products.
According to the release, in 2012, HONEY revolutionized the cannabis industry by becoming the first producer in the world to market distilled cannabis oil in vape cartridges. Today, they provide authentic, full spectrum oil in vape cartridges, applicators, and caps to legal dispensaries and delivery services.
Liberty Health Sciences Inc (OTCMKTS:LHSIF) frames itself as a company that engages in the production and distribution of medical cannabis primarily in the State of Florida.
It has a strategic partnership with Veterans Cannabis Project to support various research projects focused on the treatment of service related trauma with cannabis derived products; and partnership with AdaViv Inc. to enhance production of cannabis.
The company is headquartered in Toronto, Canada.
Liberty Health Sciences was established to own and operate medical marijuana licenses in the United States. To date, the company owns one of 14 licenses issued in the state of Florida as well as 50.1% interest in a provisional processing license and a provisional dispensary license, both in Ohio. Liberty has also made an investment in a provisional medical license in the Commonwealth of Massachusetts.
The stock has suffered a bit of late, with shares of LHSIF taking a hit in recent action, down about -11% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -11%.
Liberty Health Sciences Inc (OTCMKTS:LHSIF) generated sales of $17.8M, 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 10.4% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($25M against $25.5M, respectively).
Cannabis Strategic Ventures (OTCMKTS:NUGS) just announced that the company closed out the month of June with continued sales momentum, posting its second-best week in Company history, with over $550,000 in sales of cannabis products (an annualized pace of better than $28 million).
“It’s no surprise that we keep setting or closing in on new record sales numbers for days, weeks, months,” noted Simon Yu, CEO of Cannabis Strategic Ventures. “It’s hard to imagine that we won’t see this continue in July, August and beyond. This is the product of better production practices, better products, expanded production capacity, and better positioning in our relationships with California distributors. We are very well-positioned for continued growth as we head into an exciting second half of 2020.”
Cannabis Strategic Ventures (OTCMKTS:NUGS) is one of fastest growing stories in the cannabis space, with a strong presence in the California cannabis marketplace showing consistent growth on a sequential monthly and quarterly basis. Q2 2020 appears to be a breakout quarter for the company based on the data and communications so far established.
In addition, the company has recently successfully expanded its production capacity by as much as 2.5x. That expansion was necessary to keep up with demand as overall top line sales have increased rapidly during calendar Q2, with the monthly pace of sales this quarter on pace to average more than 800% above the average monthly pace seen in calendar Q1. The new farm will presumably balloon that capacity factor when it comes online for operations.
According to its most recent release, the company has been seeing consistent growth in orders and pricing standards and sees continued advances in these trends as well as continued favorable conditions in the California cannabis market heading into the heart of the summer months. In addition, the Company does not anticipate headwinds from the recent surge in COVID-19 cases in California. Management notes the surge in cases in March and April led many observers to forecast demand challenges in the cannabis market, which drove widespread reductions in headcount and production activity by cannabis cultivators. Cannabis Strategic Ventures did not reduce production during this period, which turned out to be a beneficial strategic decision for shareholders as demand strengthened and Californians faced rising prices and cannabis supply shortages in May and June.
The Company stated in the release that it looks forward to continued momentum and a strong focus on expansion and growth during the second half of 2020.
Cannabis Strategic Ventures (OTCMKTS:NUGS) pulled in sales of $1.4M in its last reported quarterly financials, representing top line growth of 91.4%. The company also has provided data from recent operations that suggests it is on pace to surpass $11M in sales in 2020, outperforming its guidance from December projecting $5M in 2020 sales.
Curaleaf Holdings Inc (OTCMKTS:CURLF) just announced that it has signed an amended agreement for its acquisition of GR Companies, Inc., the largest private vertically-integrated multi-state operator in the United States.
Joseph Lusardi, CEO of Curaleaf, stated, “Today’s announcement marks another significant step forward in finalizing our acquisition of Grassroots, providing Curaleaf an important entry to highly populous, vertically integrated markets in the Midwest. The pending integration of Grassroots will solidify Curaleaf’s position as the world’s largest cannabis company by revenue and the most well-diversified, vertically integrated cannabis company in the United States, the world’s largest cannabis market. We are well positioned to continue to lead our growing industry, and we look forward to closing the transaction and serving new patients and customers in the Grassroots community.”
Curaleaf Holdings Inc (OTCMKTS:CURLF) promulgates itself as a company that operates as an integrated medical and wellness cannabis operator in the United States. The Company is the parent of Curaleaf, Inc., a leading vertically integrated cannabis operator in the United States. Headquartered in Wakefield, Massachusetts, Curaleaf, Inc. has a presence in 12 states.
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.
If you’re long this stock, then you’re liking how the stock has responded to the announcement. CURLF shares have been moving higher over the past week overall, pushing about 9% to the upside on above average trading volume. CURLF shares have been relatively flat over the past month of action, with very little net movement during that period.
Curaleaf Holdings Inc (OTCMKTS:CURLF) managed to rope in revenues totaling $129.8M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 177%, 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 ($251M against $177.1M).
Aphria Inc (NYSE:APHA) has recently emerged as perhaps the best value in the big Canadian space, trading as low as 1.7x sales on a forward basis in recent months at the depths of the market lows.
The stock has clearly been among the leaders in the space in recent action, rising as much as 250% above its March lows on a steady increase in volume, and giving up very little in any pullback along the way. As the space goes, it would appear that APHA goes a bit better. We like this one. It is something of the antithesis to what we might feel about TLRY when it comes to “big cannabis” at this stage. That said, we leave it up to the reader to form his or her own conclusions upon sufficient due diligence, which is always vital.
Aphria Inc (NASDAQ:APHA) touts itself as one of Canada’s lowest cost producers, produces, supplies and sells medical cannabis. The company is truly powered by sunlight, allowing for the most natural growing conditions available. “We are committed to providing pharma-grade medical cannabis, superior patient care while balancing patient economics and returns to shareholders. We are the first public licensed producer to report positive cash flow from operations and the first to report positive earnings in consecutive quarters.”
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. Shares of the stock have powered higher over the past month, rallying roughly 5% in that time on strong overall action.
Aphria Inc (NASDAQ:APHA) pulled in sales of $143.9M in its last reported quarterly financials, representing top line growth of 95.5%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($515.1M against $178.1M).
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