5 Companies To Watch As The Cannabis Market Goes Global

July 24, 2018 - OilPrice.com


All year long, companies have been seeing green.

Marijuana is poised to become a major growth sector, thanks to positive developments like Canada’s recent legalization.

The opportunity in Canada along could be worth it: according to some estimates, the recreational market for pot in Canada could be as large as $10 billion.

But it’s not just Canada. States all across the U.S. are embracing more relaxed cannabis regulations. The chances of a full legalization stateside are growing day by day.

Cannabis research firm Arcview sees North American legal pot sales reaching $22 billion by 2021 and $57 billion worldwide by 2027.

Wall Street has taken notice. Even institutional investors like pension funds are starting to take marijuana stocks more seriously.

Still, there are winners and losers out there, and cannabis companies can go bust just as quickly as they go boom.

Here’s 5 companies leading the green revolution.

#1 Canopy Growth Corp. (NYSE:CGC, TSX:WEED)

A real titan in the field, Canopy is the biggest grower in Canada and the single largest marijuana stock in terms of market cap.

For the first few months of 2018, Canopy’s stock was up and down. But since May it’s taken off, as the company’s position improves, and it builds momentum for 2019, when marijuana demand in Canada is expected to be much higher due to this year’s legalization. To date Canopy is up 25% from last year.

Canopy has a few notches on its belt. It’s the only marijuana stock to be listed on the New York Stock Exchange.

It’s got the most square footage of any grower, and its acquisitions throughout Canada ensure that it’ll maintain that dominance going forward.

Beyond its own product, Canopy has deals with other suppliers: a two-year deal with Sunniva allows Canopy to purchase 90,000 kgs.

Plus, it’s looking to break into the recreational market. It’s working with beverage maker Constellation Brands to develop cannabis-infused drinks. Constellation clearly believes that Canopy can deliver; the company bought a 9.9% stake in Canopy last year.

Right now Canopy could be a no-brainer for anyone looking to get in on the marijuana boom.

#2 Scythian Biosciences Corp. (TSXV: SCYB.V; OTC:SCCYF)

It’s a marijuana investment company unlike any other.

Scythian is way more than biosciences company, it is an incubator for cannabis assets.

It’s one of the only truly global cannabis companies, and it’s just struck it rich.

On July 17th, Scythian announced a $193 million agreement to sell its Latin American assets to Aphria Inc. (OTCMKTS: APHQF), a major marijuana player.

The announced divestiture of Scythian’s LATAM assets clearly demonstrates its ability to identify, acquire and flip profitable projects - and with the LATAM assets, all within a six-month timeframe.

The sale is huge, and it signals Scythian’s arrival as a “first mover” in the global cannabis business.

Nearly 1.5 billion people are potential customers for marijuana products, but the major weed firms haven’t given them any attention.

That’s where Scythian comes in.

Scythian’s strategy is to find small, ready to develop marijuana assets in Latin American and European markets. It incubates these assets, building them into viable investments, before cashing in for a big payday.

And Scythian already has more of a global footprint than most cannabis companies. Its target in Argentina, being sold to Aphria, is the only company to receive government approval to work in medical marijuana in Argentina, and it received a license to extract, produce and research medical marijuana in Colombia.

Europe has twice as many viable customers for cannabis products than the U.S., which could translate into double the sales once laws are relaxed.

The UK is a particularly large opportunity: with black market marijuana sales of $3.46 billion and 3 million users, the UK could be the next frontier for marijuana firms, especially since political parties have started calling for more relaxed laws.

Scythian is a little company, but it’s received ample support from Aphria, one the biggest marijuana firms around.

Aphria pumped $14 million into Scythian earlier this year, and the $193 million asset sale is a sign that the two companies are working closely together.

Scythian has a global team scattered across three continents, searching out new ventures and opportunities in need of guidance, investment and incubation.

Scythian basically acts like an incubator for Aphria—able to identify opportunities on a global scale, and profitably sell them on successful development.

The global opportunities are boundless from Scythian’s point of view.

#3 Scotts Miracle Gro. (NYSE:SMG)

While not technically a marijuana stock, Scotts Miracle Gro is poised to ride the green wave.

This is a company that will make billions selling equipment needed by growers, from fertilizers to hydroponic supplies.

The company’s hydroponics subsidiary, Hawthorne Gardening, acquired General Hydroponics in 2015 and bought out a majority of Gavita in 2016. With these acquisitions under its built, the subsidiary’s sales exploded in 2017, rising by 137% to $287 million.

But this fast-growing sector only generates 11% of Scotts’ sales, which is what makes this stock so appealing. It’s basically a way to profit from the marijuana boom…without exposing yourself to risk from green ventures that go boom and bust.

And while Scotts weathered some bad news earlier this year, with sales slipping owing to poor weather and some hefty expenses, don’t expect this stock to falter in the long term. Another acquisition, this time of hydroponics supplier Sunlight Supply, should keep investors thirsty for more.

#4 Aurora Cannabis (NASDAQOTH:ACBFF)

Aurora Cannabis has profited handsomely from the Canadian legalization. The company has been rushing to increase its acreage in order to meet future demand.

After acquiring Cannimed for $1.1 billion, Aurora continued its streak by taking over MedReleaf for $2.5 billion in an all-stock transaction, the biggest marijuana deal in history.

With these acquisitions, Aurora will be able to produce 570,000 kgs in 2019, which should put it in great shape to meet market demand next year. Better yet, the company has an agreement with liquor distributor Alcanna, which operates 229 stores across Canada, and could easily start distributing marijuana products.

But Aurora won’t stop. It’s now established a partnership with cosmetic company Evio Beauty Group to develop hemp-based cosmetics. It’s all part of Aurora’s plan to diversify its revenue stream, moving away from straight marijuana sales to embrace the wide range of applications available to cannabis.

The big prize for Aurora is the US market. CCO Cam Battley recently indicated the company’s hope to move to the US exchange, “in a big way,” once conditions are right.

#5 MedMen (CNSX: MMEN)

Valued at more than $1.65 billion, with 800 employees and 18 licensed marijuana facilities in California, Nevada and New York, MedMen is a large U.S. marijuana firm and one of the biggest dispensaries around.

Its stores are affectionately known as the “Apple Stores of weed,” and the company has done well marketing marijuana in the three U.S. states.

But now it’s looking to raise additional capital in Canada and take advantage of the legalization there to tap into a new market.

The company announced a 50/50 joint venture, MedMen Canada, with Canadian-based Cronos Group, the first ever marijuana firm to be listed on the Nasdaq.

Its IPO proved somewhat disappointing, with the stock price falling shortly after the initial wave of enthusiasm dropped off. But the company has still managed to raise over $100 million since 2017.

MedMen’s CEO Adam Bierman wants to break out of the small U.S. markets, where MedMen has thrived. The company is committed to changing the optics of pot, launching ad campaigns encouraging people to forget about “stoners,” and has even worked towards using pot to combat the US opioid epidemic.

And the company is continuing to grow, adding a thirteenth location to its chain.

Other companies making big moves in the marijuana space:

Beleave (CSE:BE): Beleave is a biotech company focused on the production of medical marijuana in Canada. Its wholly-owned subsidiary, First Access, applied for a pre-license inspection in March 2017.

Beleave became Cannabis Wheaton’s fifth production partner in May and the parties will work cooperatively to identify an appropriate second site to be acquired and developed by a newly formed special purpose subsidiary of Beleave ("NewCo"). The proposed second site is expected to be located in Ontario and will be designed to accommodate an estimated 200,000 square feet of cultivation space.

Hydropothecary Corp (TSXV:HEXO) is a another heavy hitter in Canada’s cannabis scene. With former BC Health Minister Dr. Terry Lake as the VP of Corporate Social Responsibility, and the well-versed Ed Chaplin, who has raised millions for his previous ventures, as the Chief Financial Officer, the company is sure to have a bright future ahead.

With 4 primary products, including Canada’s only peppermint flavored medical cannabis oil sublingual mist, Hydropothecary has chosen quality over quantity. Offering patients the ability to administer their medication in a smoke-free format provides users with an option that is not available just anywhere.

Keep an eye on this stock moving forward as it may just have what it takes to take the industry by storm come June 2018.

Emerald Health Therapeutics Inc (TSXV:EMH) is another producer and distributer of medical marijuana. Based in British Columbia, Emerald Health is fully licensed by Access to Cannabis for Medical Purposes Regulations (ACMPR) and provides high quality medicine of different varieties. The company’s approach to research is what really sets the company apart from the competition. With the incredible emphasis placed on isolating the most important qualities in each strain and creating new products for patients, it is no wonder their medicine is so popular.

**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**

Notice for Forward-Looking Information

Certain statements in this press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Such forward-looking information includes information relating to Scythian’s proposed acquisition of Marigold, MMJ Colombia, ABP and ColCanna; the expected sale of these companies to Aphria and resulting receipt of $193M from Aphria; that cannabis use and sales will grow as predicted; Scythian’s intended acquisition of various foreign assets and potential sale to Aphria; that Scythian will be in a prime position in the UK and Europe to take a substantial portion of the cannabis market when laws permit; that Scythian can create its own “ecosystem” – from plant to product in each territory it enters; its plans to incubate projects in various locations throughout the world; it could be granted licensable patents; and that it’s traumatic brain injury solutions will be accepted by medical practitioners. Readers are cautioned to not place undue reliance on forward-looking information. Forward looking information is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from those contemplated in the forward-looking information, and even if such actual results or events are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Such risks and uncertainties include, among other things: that a regulatory approval that may be required for the intended acquisitions and subsequent sale are not obtained or are obtained subject to conditions that are not anticipated; that a condition to the completion of the intended acquisitions or sale may not be satisfied; construction delays and costs overruns; potential future competition in the markets Scythian operates; that Scythian’s technology may not achieve the expected results and its accomplishments may be limited; that Scythian may not establish a market for its services as expected; competitors may quickly enter the industry; general economic conditions in the US, Canada and globally; the inability to secure financing necessary to carry out its business plans; competition for, among other things, capital and skilled personnel; the possibility that government policies or laws may change; technological change may result in Scythian’s solutions not be the best or cheapest available; Scythian not adequately protecting its intellectual property; interruption or failure of information technology systems; the cannabis market may not grow as expected; Scythian’s technology may not achieve the expected results and its accomplishments may be limited; even if it is granted patents, it may not have success at licensing its technologies; Scythian’s business plan also carries risk, including its ability to comply with all applicable governmental regulations in a highly regulated business; investing in target companies or projects which have limited or no operating history and are engaged in activities currently considered illegal under US federal laws; changes in laws; and regulatory risks relating to Scythian’s business, financings and strategic acquisitions.

DISCLAIMERS

PAID ADVERTISEMENT. This communication is a paid advertisement and is not a recommendation to buy or sell securities. Oilprice.com, Advanced Media Solutions Ltd, and their owners, managers, employees, and assigns (collectively “the Company”) has been paid by the profiled company or a third party to disseminate this communication. In this case the Company has been paid by Scythian Fifty-eight thousand three hundred thirty three US dollars for this landing page and certain banner ads. This compensation is a major conflict with our ability to be unbiased, more specifically:

This communication is for entertainment purposes only. Never invest purely based on our communication. Gains mentioned in our newsletter and on our website may be based on end-of- day or intraday data. We have been compensated by Scythian to conduct investor awareness advertising and marketing for Scythian. Therefore, this communication should be viewed as a commercial advertisement only. We have not investigated the background of the company. The third party, profiled company, or their affiliates may liquidate shares of the profiled company at or near the time you receive this communication, which has the potential to hurt share prices. Frequently companies profiled in our alerts experience a large increase in volume and share price during the course of investor awareness marketing, which often end as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in volume and share price is likely to occur.

We do not guarantee the timeliness, accuracy, or completeness of the information on our site or in our newsletters. The information in our communications and on our website is believed to be accurate and correct, but has not been independently verified and is not guaranteed to be correct. The information is collected from public and non-public sources but is not researched or verified in any way whatsoever to ensure the information is correct.

SHARE OWNERSHIP. The owner of Oilprice.com owns shares and/or stock options of this featured company and therefore has an additional incentive to see the featured company’s stock perform well. The owner of Oilprice.com will not notify the market when it decides to buy or sell shares of this issuer in the market. The owner of Oilprice.com will be buying and selling shares of the featured company for its own profit. This is why we stress that you conduct extensive due diligence as well as seek the advice of your financial advisor or a registered broker-dealer before investing in any securities.

NOT AN INVESTMENT ADVISOR. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

INDEMNIFICATION/RELEASE OF LIABILITY. By reading this communication, you agree to the terms of this disclaimer, including, but not limited to: releasing The Company, its affiliates, assigns and successors from any and all liability, damages, and injury from the information contained in this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.

RISK OF INVESTING. Investing is inherently risky. While a potential for rewards exists, by investing, you are putting yourself at risk. You must be aware of the risks and be willing to accept them in order to invest in any type of security. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell securities.