Emerging Trends: Investing in Canadian Cannabis Stocks in 2023
The Canadian cannabis market and top marijuana stocks have developed incredibly since its legalization in 2018. According to Statista, legal recreational cannabis sales in Canada will reach CAD 4.5 billion in 2022 alone. This number will climb as more stores open nationwide, and more products hit the market.
The Canadian cannabis sector has immense growth potential. With a population of over 37 million people, Canada is a sizable market for cannabis businesses trying to develop. Furthermore, as other nations legalize cannabis for medical and recreational purposes, Canadian businesses are well-positioned to export their products and knowledge.
In addition to the domestic market, Canadian cannabis companies are also eyeing international opportunities. Several nations have launched legal reforms, paving the door for cannabis product import and export, putting Canadian enterprises at the forefront of the global cannabis trade. Using their home market experience and skills, these companies strategically grow their global presence, form partnerships, and negotiate supply agreements in other jurisdictions.
While the Canadian cannabis industry will experience hurdles, such as legal complexities and competition, the overall trend indicates a positive picture for investors in 2023. The industry’s development potential, reinforced by shifting public sentiment, expanded retail channels, and global opportunities, makes Canadian cannabis stocks an appealing investment option for investors eager to capitalize on the evolving cannabis landscape.
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Canadian Cannabis Stocks 2023: Unveiling the Lucrative Growth Potential
- Tilray Brands, Inc. (NASDAQ: TLRY)
- IM Cannabis Corp. (NASDAQ: IMCC)
- Aurora Cannabis Inc. (NASDAQ: ACB)
Tilray, Inc.
Tilray, Inc. is a cannabis CPG company with operations in South America, Europe, Australia, and the United States. As a result of its domination in the Canadian market, the company has established itself as one of the world’s most successful cannabis businesses. Tilray has expanded its activities within the United States. Tilray was the first company in Germany to produce and sell medical marijuana. CBD-infused meals and beverages, according to the business, are particularly popular in the US and Canadian markets. Tilray and Great North Distributors’ 2021 agreement intends to accelerate the expansion of Canada’s legal marijuana market.
In the second quarter of fiscal 2023, Tilray recorded net revenue of $144.1 million, or $157.6 million, in constant currency. In addition, Tilray generated $25.4 million in free cash flow and $29.2 million in operating cash flow. The company’s Adjusted EBITDA was positive for the fifteenth consecutive quarter. Tilray maintains its dominance in Europe’s medical and recreational marijuana sectors. Year on year, gross profit increased by 22% to $40.1 million. In comparison to last year, the adjusted gross margin remained at 29%. In June, Tilray completed an accretive acquisition of HEXO Corp., creating Canada’s largest cannabis company by revenue and increasing Tilray’s #1 leading cannabis share by 44%.
TLRY Stock Performance
On July 5th, the shares of TLRY closed at $1.64, down 2.96% in the past month of trading. The 52-week price range for the stock is $1.50-$5.12 and is down 39.03% year to date. According to CNN Business experts, TLRY stock has a 12-month consensus price objective of $2.95 per share. This represents a 79.88 percent increase over the last trading price of $1.64.
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IM Cannabis Corp.
IMC is a global pioneer in the medical and adult-use recreational cannabis industries, operating in Israel, Germany, and Canada. According to the business, the IMC brand has helped the Israeli medicinal cannabis sector reach a vital juncture. IMC’s medical marijuana product line is growing. Adjupharm, an EU-GMP-certified medicinal cannabis distributor based in Germany, represents the company throughout Europe. The corporation has promised to develop a cutting-edge logistics hub in Germany. Adjupharm will be able to optimize its supply chain in the future with the help of this facility by repackaging cannabis in huge numbers.
Revenues for the first quarter of 2023 were $13.2 million, up 1% from $13 million in the same period last year. Furthermore, gross profit was $3.5 million in the first quarter of 2023, up 46% from $2.4 million in the same period last year. Higher-margin sales of imported premium cannabis products and reduced sales costs drive expansion. Gross margin before fair value adjustments grew from 24% in the previous quarter to 30% in the first quarter of 2023. The corporation’s operational loss in the first quarter of 2023 was $3.0 million, compared to $8.9 million in the first quarter of 2022, a 66% decrease.
IMCC Stock Performance
IMCC stock closed at $0.92 on July 5th, down 22.42% in the past month of trading. The stock has a 52-week price range of $0.59-$8.30 and is down 5.29% year to date. According to analysts at CNN Business, IMCC stock has a median price target of $1.11 per share. In this case, this would represent an increase of 14.91% from its last trading price of $0.92.
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Aurora Cannabis Inc.
Aurora Cannabis Inc. is a Canadian corporation that cultivates and exports medical marijuana to countries worldwide. To build a presence in the US cannabis industry, the company purchased Reliva, which manufactures CBD in the country. Aurora now has three more San Rafael ’71 cultivars. The business sold marijuana to Israel for $8 million. The company is now working on balancing its accounts after delivering the first batch of cannabis to the French medicinal cannabis pilot program. In May, the company expanded its market dominance in Germany by establishing its first EU-GMP-accredited production and manufacturing facility.
Third Quarter 2023 Highlights
- Achieves Second Sequential Quarter of Positive Adjusted EBITDA1
- Net Revenue Reaches $64 Million, Increasing 4% Sequentially and 27% YoY; Driving Adjusted Gross Profit1 of $30.6 Million.
- Balance Sheet Remains Strong With a Cash Position of ~$230 Million Cash on Hand with ~$80 Million of Convertible Notes Remaining Outstanding.
- Clear Path to Achieve Positive Free Cash Flow by the End of Calendar Year 2024 Through Additional $40 Million of Annualized Cost Efficiencies
ACB Stock Performance
ACB stock closed at $0.554 on July 5th, up 7.72% in the last month of trading. Currently, the stock has a 52-week price range of $0.49-$1.94, down 39.94% year to date. According to analysts at CNN Business, ACB stock has a median price target of $0.75 per share. This would be an upside of 35.22% from its last trading price of $0.554.
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Navigating the Canadian Cannabis Market
These are just some of the best Canadian cannabis stocks to watch in 2023. It’s important to note that the cannabis industry is still in its infancy and that many factors can influence the performance of specific stocks. As with any other investment, rigorous research and consultation with a financial expert are required to make informed investing decisions.
Because of the high level of market volatility, cannabis stocks may be an appealing short-term investment. Cannabis stocks have a higher risk-to-reward ratio in general. Before investing, do your research on the firm. Corporate news releases and financial reports can help you discover the best corporations in any field. Using technical indicators and learning more about chart patterns may assist you in improving your trading results. With the help of today’s top Canadian marijuana stocks, investors should expect higher volatility in 2023.
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