|Bid||0.0000 x 0|
|Ask||0.0000 x 0|
|Day's Range||13.7982 - 14.4700|
|52 Week Range||5.8564 - 24.9900|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Canopy Growth (WEED) is expected to have the highest cannabis growing capacity (HMMJ) compared to Aurora Cannabis (ACB), MedReleaf (MEDFF), and Cronos (CRON). As of March 22, the consensus analyst mean rating on Canopy Growth was 2.6, which remained unchanged from the previous month. While the analyst ratings on Canopy Growth remained unchanged month-over-month in March, the consensus mean price target moved higher to 33.6 Canadian dollars from 33.1, while the median price target remained unchanged at 35 Canadian dollars.
In this part of the series, we’ll discuss how Aphria’s (APHQF) production costs have evolved in the last four quarters, just as we did for MedReleaf (MEDFF), Aurora Cannabis (ACB), and Canopy Growth (WEED) earlier. In the chart above, we can see that though Aphria’s costs per gram have seen a falling trend sequentially, its fiscal 2Q18, which ended in November 2017, saw a spike. Its cost per gram in this quarter rose to 2.13 Canadian dollars from 1.61 Canadian dollars a quarter ago.
Excluding its fiscal 3Q18, which ended in December 2017, MedReleaf (MEDFF) experienced a fall in its average cost of production on a per-gram basis. This performance was unlike that of producers (HMLSF) Canopy Growth (WEED) and Aurora Cannabis (ACB) (ACBFF), both of which experienced YoY (year-over-year) and sequential falls in their production costs. In fiscal 3Q18, the company’s total cash cost per gram sold increased to 1.83 Canadian dollars from 1.55 Canadian dollars in fiscal 3Q17.
Last week, which ended March 16, 2018, NAC (National Access Cannabis) signed a binding term sheet with CannaRoyalty (CRZ) (CNNRF) to carry the latter’s products in NAC’s stores across Canada. National Access Cannabis has locations in most of the key provinces of Canada. Given the anticipation of high demand for adult use of recreational cannabis, companies (HMMJ) including Canopy Growth (WEED), Aurora Cannabis (ACB) (ACBFF), and MedReleaf (MEDFF) could engage in arrangements with retailers as well as other companies to gain a piece of the lucrative cannabis market share.
MedReleaf’s (MEDFF) selling price has seen its ups and downs over the last five quarters, unlike Aurora Cannabis (ACB) (ACBFF) and Canopy Growth (WEED), which have seen upward trends quarter-over-quarter. During its fiscal 3Q18, which ended in December 2017, MedReleaf’s average selling price per gram stood at 8.98 Canadian dollars. Compared to a year earlier, its prices fell as much as 14%.
The trend reflects what we saw for Canopy Growth (WEED) earlier in this series. The above chart shows the cash cost evolution for Aurora Cannabis’s dried cannabis sold on a per-gram basis. In its fiscal 2Q18, which ended in December 2017, the company’s cash cost of sales per gram stood at 1.74 Canadian dollars.
Selling prices and per-gram production costs for cannabis will likely be defining factors in the success of Canadian cannabis producers (HMMJ). Most producers will be dealing with one purchaser in each province—the government—which will mean less bargaining power for producers. Pricing in each province will vary depending on demand and the objectives the provincial governments aim to achieve.
MedReleaf currently has a completed facility of 55,000 square feet in Markham, Ontario. As of the date of this writing, Phase 1 of the Bradford facility is complete, and together with the Markham facility, it has a cultivation capacity of 17,000 kilograms per year.
In the earlier part of the series, we discussed how Aurora Cannabis (ACB) (ACBFF) plans to fund its production facility in Denmark. Aurora Cannabis is not the only Canadian cannabis-licensed producer to eye international markets. On March 6, Bloomberg Markets reported that Canopy Growth (WEED) put in a bid for privately held Spanish company Alcaliber.
In addition, by tracking analysts’ revisions, we can determine the direction of changes in estimates. In this article, we’ll discuss analysts’ estimate revisions for 2018 and 2019. In the chart above, we can see analysts’ estimate revisions for six companies for 2018 since the beginning of the year.
Last week, CannTrust (TRST) began trading on the TSX (Toronto Stock Exchange) under the ticker symbol “TRST.” The company graduated from the CSE (Canadian Stock Exchange) where it was trading earlier. On March 2, InMed (IMLFF), which is currently listed on the CSE, announced that it received conditional approval to list its common stock on the TSX. The company’s CEO and president, Eric Adams, stated, “This milestone furthers our corporate goal of securing a leadership position in this high-growth sector.
Last week, Shoppers Drug Mart entered a supply agreement with Aurora Cannabis (ACB)(ACBFF) for medical cannabis. According to the press release issued by Aurora Cannabis, its product will be sold online, since the current Canadian regulations do not allow for the retail sale of medical cannabis. With the addition of Aurora Cannabis, Shoppers Drug Mart has signed up four medical cannabis providers (HMMJ). The others include Tilray, Aphria (APHQF), and MedReleaf (MEDFF).