Disturbing Message About President Trump
I wasn’t sure if I should share this with you. The following message about President Trump will be disturbing to some audience.
Set your calendars for October 17.
That’s when recreational marijuana will officially be legal for purchase by adults in Canada after legalization was passed in the country earlier this summer.
Canada is just the second country in the world to legalize the sale and use of recreational marijuana, and since the passing of this legislation pot stocks have been on a tear. And it’s no wonder why.
When legalization goes into effect, the recreational market in Canada is expected to add $5 billion in annual sales, a figure that is expected to make pot stocks more profitable.
However, that $5 billion in sales won’t be distributed across all of the marijuana growers in Canada. Despite the fact that Health Canada has issued 116 cultivation, sale, or production licenses, just four growers will ultimately generate half of all cannabis for the domestic markets and for exports.
These four growers are expected to produce a combined 1.5 million kilograms annually. Here’s what you need to know about these four pot stocks.
Aurora has grown through at least 14 acquisitions in the last two years as it has sought to “create a preeminent global cannabis company.” While the company has accumulated $160 million in debt likely from these recent acquisitions, that debt is offset by cash and equivalents of $223.6 million.
These acquisitions have certainly paid off in terms of production capacity.
The company recently acquired Ontario-based MedReleaf for $2.5 billion, and with it, 140,000 kilograms of annual production. They also recently inked a partnership with Alfred Pedersen & Son in Denmark where they are retrofitting a 1 million square-foot facility to grow marijuana. When up and running, this Aurora Nordic facility is expected to product 120,000 kilograms per year.
And all of this is on top of Aurora’s 250,000 kilograms per year produced at their 800,000 square-foot Aurora Sky facility, and 1.2 million square-foot Aurora Sun facility in Medicine Hat, Alberta.
Canopy Growth (NYSE: CGC)
It should be no surprise to see Canopy Growth (NYSE: CGC) on this list of biggest producers.
The largest pot stock by market cap is thought to produce in the ball park of 500,000 kilograms per year on its 2.7 million square feet of licensed production capacity space.
But Canopy Growth isn’t just a bet on the Canadian cannabis market, the company is a worldwide leader in the medical marijuana space with subsidiaries and partnerships in countries like Australia, Brazil, Chile, Denmark, Germany, and Spain.
Canopy Growth CEO Bruce Linton said recently, “We’re a global medical cannabis company. When we talk about being in five continents, it’s five continents for medical cannabis. … The medical portion we speak of, over the next two and three years is as big, or much bigger than, the recreational portion.”
The company is already one of the top growers in the medical marijuana space, and is expected to reach an annual production capacity of 255,000 kilograms when its facilities are operating at full capacity.
Its Aphria One facility is expected to be completed in January 2019, and is expected to yield 100,000 kilograms over its 1 million square-feet. Aphria, which is the leading maker of vaporizers and capsules products, also just announced the construction of a new extraction facility to be focused on cannabis concentrates which is expected to produce the equivalent of 25,000 kilograms per year.
It also partnered with Double Diamond Farms earlier this year to retrofit an existing vegetable greenhouse for cannabis production, a project that is expected to produce 120,000 kilograms annually when at full capacity.
These increases in capacity should set the company up well for Canada’s legalization going into effect, as well as to help the company deliver as the exclusive Canadian distribution partner for Southern Glazer’s Wine and Spirits.
Green Organic Dutchman (NASDAQ: TGODF)
The Green Organic Dutchman (NASDAQ: TGODF) was one of the hottest IPOs this year, and it’s no wonder why considering the hype around Canadian marijuana growers.
But there’s reason to be excited about this stock.
In early June, it was expected that Green Organic Dutchman would produce 116,000 kilograms when fully operational, but then the company announced three new capacity expansions in the span of just 13 days.
The first announcement came on June 14 when the company announced a partnership with Epican Medicinals in Jamaica to build a new 125,000 square-foot facility capable of producing 14,000 kilograms per year for Jamaica and international markets.
That was followed up on June 21 with an announcement that the company would be constructing a new 287,245 square-foot facility for its beverage division that is expected to produce 40,000 kilograms per year.
And then, on June 27, the company formed a joint-venture with Queen Genetics/Knud Jepsen A/S in Denmark for a 200,000 square-foot facility with 25,000 kilograms in annual production capacity per year.
All told, the Green Organic Dutchman is now expected to product 195,000 kilograms per year, earning it a spot on this list.