While recreational and medical marijuana is not one of the 30 emerging technologies we cover here at Nanalyze, it’s a hot topic right now with our lovely readers. Our article on 57 marijuana stocks to invest in (or not) has topped 8,000 shares and our article on medical marijuana pharma stocks has been quite popular as well. We’ve done quite a bit of research around this topic now and our takeaway is that while the majority of over-the-counter (OTC) stocks about as desirable as a big bag of seedy Mexican brick weed, the big Canadian weed growers are where the investment opportunity lies for now. Here are the marijuana stocks that claim to be growing weed which we highlighted before:
11 Marijuana Stocks that Claim to Be Growing Weed
|Company||Ticker||Share Price||Cap (USD)||Focus||Country|
|Emerald Health Therapeutics||CVE:EMH||0.86||55||Production||Canada|
|Golden Leaf Holdings||CNSX:GLH||0.31||26||Production||Canada|
With Canada moving to legalize recreational marijuana net year, the focus is on the people who grow a weed and then sell it for extremely high margins. We’ve already written about Canopy Growth and Aphria. In the news this past week, Canopy Growth moved to acquire Mettrum Health in a $430 million dollar deal so we’re already starting to see some consolidation in this space. What we’re interested in doing now is looking at the remainder of the growers listed above to see which ones are viable investment opportunities.
If you’ve ever grown weed, or knew a fella who had a grow operation, you’ll get a kick out of this:
How funny is that? The cops came and snatched their crops because they didn’t take into account that their heat lamps generate well…. a lot of heat. Those same heat lamps require a lot of electricity too. When you’re growing weed, you should also pay attention to the spike in your electric bill. The business model any marijuana grower uses to grow skunk buds in their closet has not changed one bit. In order to get into the business of growing weed, you’ll need:
- A light source
- Outdoors the sun is free
- Indoors requires electricity
- Soil or hydroponics
That’s it. The business model is simply how cheaply you can produce quality weed and how much you can sell it for. Aphria claims to be the cheapest grower of weed at the moment.
The single question you should be asking any one of these growing companies first is “how much weed are you growing and selling”? If the answer is not expressed in kilos, move on. None of this “well we’re going to grow when we get our license” crap. You’re either growing or you’re not. Using this measure, we can look at our 11 growers listed above to see how much weed they are growing. Vodis Pharmaceuticals and Canadian Cannabis aren’t realizing any revenues from growing nor do we see any mention of kilos grown per month. We’re dropping them off our list.
|Weed Growers||Ticker||Kilos Last Quarter||Rev Last Quarter||Profit/Loss|
|Canopy Growth||TSE:CGC||900 (est)||7||-4.68|
|Surpreme Pharmaceuticals||CNSX:SL||0||0||-1 (est)|
|Emerald Health Therapeutics||CVE:EMH||???||0.048||-1|
|Golden Leaf Holdings||CNSX:GLH||???||2.5||-1.4|
If you’re one of the growers listed above that doesn’t have numbers on the “kilos sold” column, please make available information about how many kilos you are selling just like the big growers on the list. Take a page from grower Organigram and put together a slide that looks like this:
Investors shouldn’t have to go digging through your SEDAR filings to locate this stuff.
While doing research for this article, we came across an excellent chart from Canopy Growth that shows who the real players in the marijuana grower space:Firstly, the bar titled “PF Canopy” means “pro forma Canopy” which shows the revenues that Canopy Growth expects once their acquisition of Mettrum Health is finalized. Secondly, this pretty much matches the list we had of who is growing weed. We’re going to trust that Canopy, the world’s biggest grower of marijuana that trades on a public stock exchange, has a good grasp on who their competition is. If you are a “grower” and you’re name is not on the above chart it’s because you’re not a player. You’re only hoping to be a player. As investors, we’re not interested in buying stocks that promise hope, we’re interested in buying marijuana stocks that are growing weed and selling it.
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