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On Friday, the cannabis sector came off its lows and ended the week on a high note. This rally took place while the overall market also came off its lows of the week and we are monitoring how the market trades from here.
Canada’s recreational cannabis market will open this week and this represents a major milestone for the burgeoning sector. Today, we have provided an update on 3 companies that are levered to this opportunity and we recommend keeping an eye on this Canadian cannabis opportunities.
Aphria: Surges Higher on Strong Earnings
Aphria (APH.TO) (APHQF) traded higher after reporting first quarter financial results and the market responded favorably to these numbers. The Canadian cannabis producer also received coverage from Bryan Garnier, which initiated coverage with a $31 price target and we are monitoring how the team executes from here.
The company is in the middle of a major expansion and expects to have 255,000 kilograms of Canadian production capacity by January 2019. This would make Aphria one of the largest cannabis producers in the world and we are favorable on the growth prospects heading into 2019.
Aphria has been laser focused on the recreational opportunity and has signed supply agreements with every province in Canada and the Yukon Territory, ensuring access to Aphria products for 99.8% of the Canadian population.
Aphria started fiscal 2019 by taking significant steps to solidify its position as a leading global cannabis company. The company has been executing flawlessly on this plan and this is a stock that investors need to be monitoring.
Canopy: A Global Cannabis Leader
Canopy Growth (WEED.TO) (CGC) represents the most advanced Canadian cannabis producer and we have been favorable on this opportunity since 2014. The company has been nothing short of an execution story and we are favorable on the leverage to the Canadian recreational cannabis market.
Last week, Canopy Growth’s subsidiary, BC Tweed Joint Venture and its majority-owned joint venture, Vert Cannabis were issued license amendments by Health Canada, collectively representing 1.1 million sq. ft. of new greenhouse growing space. Through its subsidiaries, Canopy established a 5.6 million sq. ft. platform, which is now over 75% licensed.
This makes Canopy Growth the largest cannabis producer in Canada and the company is focused on grabbing market share in the recreational market. Canopy has enough capacity to increase the quantity and diversity of products available to retail and wholesale customers in the recreational market and fortify the supply of cannabis products available to its medical customers.
Canopy Growth has very attractive growth prospects and this is a company that investors need to be monitoring. The company is well positioned to capitalize on the global cannabis market and we are keeping an eye on how Canopy executes on this.
Tilray: A Company Worth Watching
Last week, Tilray, Inc. (TLRY) recorded volatile price movements and we have been closely monitoring the Canadian cannabis producer. Similar to Canopy, Tilray is focused on grabbing market share in the global cannabis market and has been executing flawlessly on this plan.
Last week, Tilray announced a major development and completed the acquisition of its existing import and distribution partner Alef Biotechnology SpA. The acquisition will allow Tilray to import, produce and distribute branded medical cannabis products in Chile and to create a hub to distribute Tilray products throughout Latin America.
In February 2017, Tilray announced a partnership with Alef to import and distribute Tilray products in Chile and Brazil. Alef is currently licensed by the Chilean government to commercially produce medical cannabis and is developing a facility to domestically produce and process medical cannabis products.
Tilray was the first Canadian cannabis producer to conduct an initial public offering on the Nasdaq and the market responded very favorably to this new opportunity. We are monitoring how the shares trade from here as Tilray continues to advance its fundamental story. This is a company to watch!