Canadian Cannabis Companies Continue To Disappoint Investors Despite Favorable Economic And Regulatory Environment

Below is a table that lists the 40 major cannabis companies in Canada.  The price per share quotes are current as of 10/10/2019 21:52 PST and are based off of otcmarkets.com and Morningstar.com. The base prices are listed in USD and CAD prices are based off the conversion rate of 1 USD equals 1.33 CAD. This rate is current as of 10/10/2019 21:52 PST.

Billion-dollar players and honorable mentions

As more US states legalize recreational marijuana and related products, many Canadian companies are naturally looking south for expansion opportunities. Despite remaining federally illegal, the United States represents huge growth prospects for the Canadian cannabis industry.

There are four large billion-dollar players in the Canadian cannabis industry and quite a few more above the 200 million market cap CAD mark. Canadians are buying substantially less recreational marijuana than the government projected amid cheap black-market marijuana. Investors have lost large amounts of money in the industry so far.

The 4 largest cannabis companies by market cap and the news headline dominators are: Canopy Growth Corp (TSE: WEED) (NYSE: CGC),
Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON),
Tilray Inc (NASDAQ:TLRY), and Aurora Cannabis Inc (TSE: ACB) (NYSE:ACB)

Additionally, there are 2 rising stars on the OTC market with market caps above CAD400 million, and four that are in the CAD300-400 million range. The 2 trading at CAD400 million plus are: OrganiGram Holdings Inc (TSE: OGI) (NASDAQGS:OGI) at CAD564 and MediPharm Labs Corp. (TSX:LABS) (OTCMKTS:MEDIF) at CAD489.

The next 4 largest in no order are: Supreme Cannabis Company (SPRWF), Valens Groworks Corp (CVE: VGW) (OCTMKTS:VGWCF), CannaRoyalty Corp (CNSX: OH) (OTCMKTS: ORHOF), and Green Growth Brands Green Growth Brands Inc (CNSX: GGB)(OTCMKTS:GGBXF).

Canadian companies: Expansion in to US

The billion-dollar companies have US expansion strategies.

Canopy Growth (CGC):will build a hemp facility in New York State to sell CBD oil.
TilrayInc (TLRY):recently bought a hemp foods company to facilitate expansion opportunities.
Cronos Group (CRON):has also acquired subsidiaries and has its eyes on the CBD and hemp market.

Aurora Cannabis(ACB): is currently active in 25 countries, but no large US market moves have happened yet.
Hexo Corp (TSX:HEXO) (NYSE:HEXO):entered a joint venture with MolsonCoors 2018, but unfortunately it has yet to pay off.

Investors get hammered and vaping woes shock cannabis industry

Despite a favorable regulatory government in Canada, the cannabis industry has hammered to investors. According to the Financial Post, the 10 largest Cannabis producers have yielded an average negative return of 57%.

Vaping products were poised to become the new frontier for cannabis products, especially Canadian firms, however that new frontier may now be threatened by increased legal and regulatory scrutiny. Washington state has just issued a 120 day emergency ban. The Trump administration was in serious talks of a federal ban only 1 month ago, and sales are down 20% or more in many US states. We can expect to see this issue get worse before it gets better, which will certainly have a negative impact on Canadian cannabis and their investors.

Conclusion

The industry has a long way to go in Canada, but with proper investment, lower prices and tax incentives along with international expansion, it could rebound in the years to come.

Let us know in the comments below if we miss any companies. Also, consider sharing your favorites and thoughts on the future of the industry.

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