Marijuana stocks have investors digging the green rush, as most boast an excess of $200 million in market cap and have minimally doubled their value over the last year. A marijuana research firm has reported that that legal sales grew by 34% last year in North America year reaching $6.9 billion, and forecast them to grow to $21.6 billion by 2021. Here are two Canadian marijuana stocks that have the most cash to grow their expansion opportunities.
Aurora Cannabis (ACBFF) $268 million
Aurora is a Canadian medical marijuana grower and retailer. As of Nov. 16th, CEO Terry Booth reported (ACBFF) was on target to have over $268 million ($340 million Canadian) in cash and cash equivalents. The company’s cash position was recently boosted by a $91 million convertible debenture as well as a separate $59 million convertible debenture.
Aurora is attempting to keep pace with demand from several avenues. Canadian medical marijuana patients have been increasing by 10% percent per month, increasing the company’s production demands. Aurora’s expansion into overseas markets has generated a budding export sales area. As Canada prepares for this summers recreational legalization, the company is preparing as well. Aurora’s main project is the 800,000-square-foot Aurora Sky, the technologically advanced growing facility in the world. Aurora Sky will lessen growing costs and can produce 100,000 kilograms annually. Aurora has also placed a bid to takeover CanniMed Therapeutics (CMMDF). The combined companies would have around 40,000 eligible medical patients and the annual production capability of 130,000 kilograms of dried marijuana.
Canopy Growth Corp (TWMJF) $278 million
Canopy Growth another Canadian marijuana producer which possesses the most popular weed brand in the country, Tweed. The bulk of Canopy Growth’s funding came from its history of making deals to sell 9.9% of its common stock beverage maker Constellation Brands (STZ) for about $190 million ($245 million Canadian) boosting (TWMJF)’s cash and cash equivalents on to about $278 million.
As Canopy Growth continues to acquire new businesses expanding its product portfolio as well as facilities to increase its production capacity, it will need a majority of the funds from the Constellation deal. Earlier in the year, it acquired Mettrum Health, which increased (TWMJF)’s access to half of Canada’s medical marijuana patients. Canopy continues to develop new grow facilities. The company’s latest quarterly report mentions over 2.4 million square feet in capacity under construction and an additional 1.7 million square feet considered for future expansion.
Investors must be aware that both Canadian marijuana stocks rely on common-stock offerings through bought-deal financings and convertible debentures to raise capital, which means that existing shareholders are consistently diluted for funding. Yet, we remain bullish on Canadian marijuana stocks and the market is hotter than ever.