|Bid||18.18 x 0|
|Ask||18.25 x 0|
|Day's Range||18.14 - 18.85|
|52 Week Range||8.21 - 25.56|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.00%|
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.
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.
Cannabis investing has evolved, with investors now having options to invest in ETFs, mutual funds and other structures. In this article, I review the current landscape, which, unfortunately, doesn't offer a lot of great choices.
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.
Over the past few months, Aurora Cannabis (ACB)(ACBFF) has become one of the most actively traded stocks on TSX. Given this liquidity and other factors, last week, the S&P Dow Jones Canadian Index Services announced the rebalancing of its S&P/TSX Composite Index and the addition of Aurora Cannabis. Last week, Bloomberg Markets reported that Aurora Cannabis is exploring the option of listing on US exchanges to gain access to US investors.
Ahead of the legalization of recreational cannabis, companies are ramping up their production capacities. Currently, Canada has a total of 91 licensed producers, of which 48 are in the province of Ontario. How a province goes about selecting its supplier will be critical for big and small players alike.
In anticipation of recreational cannabis’s legalization at the federal level in Canada (HMMJ), provinces have been doing their best to prepare. In most provinces, government agencies will oversee the procurement, distribution, and retail of recreational cannabis. On the other hand, government agencies in some provinces will oversee the procurement and distribution but will also allow private retailers to sell recreational cannabis to customers. These provinces include British Columbia, Alberta, Saskatchewan, and Manitoba.
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).