|Bid||N/A x N/A|
|Ask||N/A x N/A|
|Day's Range||30.29 - 31.93|
|52 Week Range||30.29 - 31.93|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||N/A|
|Expense Ratio (net)||N/A|
Aurora Cannabis (ACB) (ACBFF), another licensed cannabis producer, is also doing its part to expand its capacity. Aurora Cannabis currently has a total licensed capacity of 95,000 square feet, which makes up ~5% of the company’s total capacity, including that which is under construction and in design. Aurora Cannabis has ~848,000 square feet of capacity under construction, primarily in the provinces of Alberta and Quebec.
On February 20, 2018, Canopy Growth (WEED) announced that it had received a cultivation license for one of its two sites at Aldergrove, British Columbia, under its BC Tweed Joint Venture. The site’s total space will cover a total of 1.7 million square feet for cultivating cannabis, with the first site for which the company has received a license spreading over 400,000 square feet. The above chart shows the cost stack for Canopy Growth per gram of cannabis produced.
Last week, the state of Pennsylvania saw some of its first few medical marijuana (MJX) dispensaries opening doors to patients suffering from one of 17 “serious medical conditions.” This event came on the heels of more and more jurisdictions around the world recognizing marijuana for medical purposes. Medical marijuana was legalized in Pennsylvania in 2016. Marijuana is classified as a Schedule 1 drug under the act.
While marijuana stocks (MJX) ended in the negative territory week-over-week last week, two new marijuana sector-specific ETFs debuted. The Evolve Marijuana ETF (SEED) began trading on February 12, and the Emerging Marijuana Growers Index ETF (HMJR) began trading on February 14. Both these ETFs are rated as “high risk” based on volatility by the issuers, which means that the two marijuana ETFs could see high price swings. On February 12, the Evolve Marijuana ETF began trading at 20.48 Canadian dollars but closed almost 4% lower through the day at 19.99 Canadian dollars.
In the earlier parts of this series, we discussed how Canopy Growth (WEED) fared in terms of selling prices, sales volumes, and cost of production. While the company’s cost of production fell 1.9% year-over-year, its selling price rose 13% over the same period. During fiscal 3Q18, Canopy Growth reported a non-GAAP (generally accepted accounting principles) gross margin of 58% of sales, which included the cash operating costs associated with the company’s subsidiaries that aren’t currently cultivating or selling cannabis.
In the earlier part of this series, we discussed Canopy Growth’s sales drivers and how the company’s selling prices increased year-over-year. At the same time, the company also managed to lower its cost of production. In its press release, Canopy Growth reported that its per gram weighted average cost before shipping and fulfillment fell 39% to 1.03 Canadian dollars from 1.7 Canadian dollars in 3Q17.
Provinces in Canada will tightly control the supply, distribution, and sale of cannabis. With mostly just a single buyer, the government, cannabis producers will have little defense against one of Porter’s five forces: the bargaining power of customers. For example, in Ontario, the government has proposed to sell recreational cannabis, in stores and online, through OCRC (Ontario Cannabis Retail Corporation), a subsidiary corporation of the LCBO (Liquor Control Board of Ontario), which is a government enterprise and currently retails and distributes alcoholic beverages in the province. By July 2018, Ontario plans to have 40 retail locations.
There has been a great deal of enthusiasm recently among investors (MJX) when it comes to cannabis stocks. Of course, the biggest catalyst for sales growth has come from recreational use in Canada. In addition, an increase in medical and recreational cannabis use around the world may also drive sales growth for these companies.
Aurora Cannabis (ACBFF) was in the news last week, as it plans to acquire 19.9% ownership in Liquor Stores for a total value of $103.5 million. After the initial investment, Aurora Cannabis will have the option to make additional investments in Liquor Stores, up to a 40% interest. Liquor Stores is expected to set up new cannabis retail outlets and convert some of its stores to cannabis retail. The above chart shows three retail sales models that different provinces will adopt.
In the previous part of this series, we looked at Aurora Cannabis’s (ACB) (ACBFF) investment in Liquor Stores NA (LIQ). Terry Booth, Aurora Cannabis’s chief executive officer, stated that this partnership will help develop a “private retail footprint in Western Canada.” Liquor Stores NA has most of its retail stores in Alberta and British Columbia. Companies (MJX) such as Aurora Cannabis, Canopy Growth (WEED), Aphria (APHQF), and CanniMed (CMED) that are looking to sell in British Columbia and Alberta will now have the opportunity to sell through privately run retail stores.
The ETFMG Alternative Harvest ETF (NYSEArca: MJX) is one of the hottest stories in the world of exchange traded funds this year as investors have been pouring into fund. However, a potential problem lingers. ...
Scotts Miracle-Gro (SMG) has been actively participating in the cannabis business. It acquired Hawthorne Gardening, which serves the indoor gardening needs of its customers. The above chart shows the brands under the umbrella of Hawthorne Gardening, which include Botanicare, Gavita, General Hydroponics, Vermicrop Organics, and Can-Filters.