In the cannabis business, cash means leverage. It allows companies to expand, make acquisitions, buy assets, develop products, conduct research and marketing and to branch out into different portions of the industry. But, the cannabis sector is largely being avoided by some of the major banks and traditional financial institutions. This however has not stopped companies from raising a sizeable amount of cash for expansion and growth purposes. Cash on hand is extremely important moving forward as establishing a prosperous company and well known brand in this new space will require massive production capabilities and wide spread marketing campaigns. With legalization in Canada only 6 months away, this space will continue to heat up as many companies including the 3 below gear up for the explosion that is set for summer 2018.
1.GW Pharmaceuticals (GWPH) – 370M
First on this list with a whopping 370M is GW Pharma. With a lot of recent studies coming out about the benefits of CBD oil, GW plans to be a major player in this emerging side of the sector. More and more of these studies are coming out. Their data is shaping the opinions of powerful entities like the WHO to re-think their stance on CBD, putting companies like GW in a great position moving forward.
GW plans to spend a large portion of its money on research and developing its product line within the medical side of the sector. They are a ‘biopharmaceutical company focusing on discovering, developing and commercializing novel therapeutics from their proprietary cannabinoid product platform.’
They are primarily focusing on solving problems in areas such as epilepsy, the central nervous system and MS. GW is still not cash flow positive and holders of this stock must remain patient as this company is heavily invested in the research, medical and scientific portion of the industry. Gw’s lead experimental drug, Epidiolex, is a cannabidiol-based medicine that delivers a statistically significant reduction in seizure frequency for patients with two rare types of childhood-onset epilepsy, Dravet Syndrome and Lennox-Gastaut syndrome.
2. Canopy Growth Corp (WEED) – 278M
Earlier this year Canopy received an investment of 245M from Constellation Brands in exchange for 9.9% equity in the company.
Canopy’s latest quarterly report cites more than 2.4 million square feet in capacity currently in development. There is also plans for a massive BC expansion which would add 3 million square feet of growth. Canopy’s brand Tweed is currently the most recognized consumer facing brand in the cannabis space.
We all expect a large marketing push to get this brand to be even more of a household name in the near future. Canopy has its eyes set on dominating the massive rec market in Canada come next summer. Snoop Dogg is also investing in the company as his presence is bringing more attention and investment according to CEO Bruce Linton. It wouldn’t be surprising if more and more well known people in the entertainment industry continue to support these brands. Especially Canopy.
With Constellation Brand’s investment those who are most excited about the rec. side of the sector should look no further than this giant in the industry. With Constellation’s portfolio the idea of Canopy developing a cannabis related line of beverages seems very likely. Canopy has a lot of momentum and buzz around their name. Their stock has skyrocketed this past week to all time highs clearing the $30 mark.
3. Aurora Cannabis (ACB) – 268M
Aurora is the most aggressive and fastest moving company in the cannabis sector. They have constantly been making headlines throughout the last half of 2017 with bold move after bold move. They were not part of the original 13 companies who first got their licenses in Canada. Still, they have made up a ton of ground and only see Canopy as being ahead of them.
Their key expansion project is Aurora Sky in Edmonton, Alberta. It’s an 800,000-square-foot facility currently being built. It is set to be completed in mid-2018. This will be the largest cannabis growing operation in the world.
Aurora is also currently in a hostile takeover situation with CMED. The combined number of medical patients would be over 40,000. But, Aurora isn’t just looking to the medical side of the sector. They will be a major player in Canada’s rec market as well as overseas markets in Europe, Australia and South America.
They have major deals overseas including Germany’s biggest cannabis distributor Pedanios. Aurora’s stock has been on fire the past few months jumping from $2.85 a share in the beginning of October to $8.94 as of today. Look to Aurora to use its cash to expand into higher production capabilities and to effectively market its products. They plan to take on strong competitors like Canopy for the #1 spot.
For more information:
GW Pharmaceuticals : https://www.gwpharm.com/