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Canada: Top Investments in The Fastest Growing Industry in the World

Aug 7, 2016 • 7:02 PM EDT
1024px-Cannabis_02_bgiu (1).jpg
4 MIN READ  •  By Michael Berger
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The Canadian medical cannabis industry continues to be a bright spot in the cannabis sector as its constituents are led by management teams that continue to execute on business initiatives and create value for shareholders.

One the biggest developments in 2015 was the victory by Justin Trudeau and the Liberal Party as they will make cannabis legalization a priority. The outcome of the campaign was a huge victory for the Canadian cannabis industry and it has already severed as a catalyst for stocks levered to the cannabis industry.

Catalysts Ahead 

The Canadian government’s plan to legalize cannabis in spring 2017 has made several licensed medical cannabis producers attractive investment opportunities to institutional investors, hedge funds, and investments, banks.

In the last two months, licensed medical cannabis producers have raised more than $100 million of debt and equity, which will be used to support growth initiatives like land acquisitions, company acquisitions, production capacity increases, etc.

We expect this trend to not only continue but increase as licensed producers prepare for an extended period of accelerated growth following these various event-driven catalysts.

Company to Watch

KindCann Holdings is a licensed medical marijuana producer in Canada and the company will be having its initial public offering in the coming months. We believe this up and coming company is not well recognized by the market even though it has a great opportunity for continued success within it. 

This is a company investors should keep an eye on and reach out to for more information on its upcoming public offering. You can email them by reaching out to dannybrody@kindcann.com

Favorite Investment Opportunities

Canopy Growth Corp (CGC) (TWMJF): Canopy Growth is the largest legal medical marijuana producer in Canada and Technical420 considers the company to be one of the most attractive investment opportunities in the cannabis sectors. We also find the shares to be an attractive swing trade due to the rapid appreciation, which is typically followed by a contraction period.

CGC is up almost 30% during the last month and the shares are trading in very overbought territory. CGC is trading at $4.13 and it traded as high as $4.20 on Friday. TWMJF is the United States traded symbol for Canopy Growth and the shares are up more than 46% during the last month. The shares are also trading in very overbought territory and we prefer CGC over TWMJF.

Aurora Cannabis (ACB) (ACBFF): Aurora Cannabis is one of the fastest growing licensed medical cannabis producers in Canada. Technical420 has been very favorable on Aurora and we continue to view the company as one of the most attractive long-term investment opportunities in the cannabis industry.

We have been recommending ACB and ACBFF over the last two months as the company continued to see significant increases in the number of licensed patients. ACBFF is the United States traded symbol for Aurora Cannabis and the shares are up more than 44% in the last month.

Aphria, Inc. (APH) (APHQF): Aphria is a licensed medical marijuana producer in Canada and the company recently announced a profitable fourth quarter.

Technial420 is favorable on Aphria’s potential for success in the Canadian market and we believe that the company is an attractive investment opportunity.

OrganiGram (OGI) (OGRMF): OrganiGram was the first licensed producer to report to be cash flow positive and the company is the second largest licensed producer in Canada.

OrganiGram has seen strong revenue growth and it has reported to be profitable in its most recent quarter. The company has seen its stock rally more than 300% during the last year and we see further upside from here.

A Short-Term Recommendation

Although Technical420 is very favorable on the opportunities within the Canadian Licensed Medical Marijuana Producer sub-sector of the cannabis industry, the stocks are up a significant amount in the last month and we expect to see a near term contraction. We exited a number of position in our Mock Portfolio for substantial gains last week. To find out our next move, subscribe here.

Long-term investors should ignore the short term trading opportunities and instead focus on adding to existing position on weakness. Over time this will be the best way to lock in strong returns and build up your investment as the company continues to execute. 

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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