Growth Potentials: Top Canadian Cannabis Stocks for October
Investors interested in top Canadian cannabis stocks are in for an exciting trip in October 2023. Despite experiencing its fair share of ups and downs, the Canadian cannabis market is estimated to have a value of $8.5 billion this year, showing consistent growth over the previous few years.
However, the indisputable impact of the thriving US cannabis industry on Canadian cannabis companies is what makes October particularly fascinating. Canadian businesses are well-positioned to gain from expanded export opportunities and potential cross-border alliances as regulatory reforms occur south of the border. However, great potential also carries considerable risk, highlighting the significance of incorporating sound technical analysis into your trading strategy and adopting appropriate risk management strategies to navigate this constantly changing environment confidently. We’ll look into these factors in more detail in this article and highlight some of the best Canadian cannabis stocks to watch in October.
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Top Canadian Cannabis Stocks for Your October Watchlist
- Tilray Brands, Inc. (NASDAQ: TLRY)
- Canopy Growth Corporation (NASDAQ: CGC)
- Village Farms International, Inc. (NASDAQ: VFF)
Tilray, Inc.
Tilray, Inc. is a cannabis consumer packaged goods (CPG) company with operations in South America, Europe, Australia, and the US. Due to its domination in the Canadian market, the business has become one of the most prosperous cannabis businesses in the world. Tilray has stepped up its footprint in the country. The first firm to grow and market medical marijuana in Germany was Tilray. The company claims that the US and Canadian markets are particularly favored for CBD-infused foods and drinks.
Financial Highlights – 2023 Fiscal Fourth Quarter
- Record Q4 Net Revenue of $184 Million, Representing 20% Growth Year over Year, $627 Million of Net Revenue for FY2023; On a Constant Currency Basis, FY2023 Net Revenue Grew 6% to $668 Million
- $8 Million of Net Cash from Operating Activities Generated for FY2023 Achieved Nearly $200 Million Improvement in Adjusted Free Cash Flow Compared to FY2022
- Increased Tilray’s #1 Cannabis Market Share Position in Canada to 13% with HEXO Acquisition and Substantially Grew Medical Cannabis Market Position Across Europe
Fiscal Year 2024 Guidance
For its fiscal year ended May 31, 2024, the Company expects to achieve adjusted EBITDA targets of $68 million to $78 million, representing growth of 11% to 27% as compared to fiscal year 2023. In addition, the Company expects to generate positive adjusted free cash flow.
TLRY Stock Performance
On September 29th, the shares of TLRY closed at $2.39, down 0.42% in the past month of trading. The 52-week price range for the stock is $1.50-$5.12 and is down 11.15% year to date. According to CNN Business experts, TLRY stock has a 12-month consensus price objective of $2.70 per share. This represents a 12.50 percent increase over the last trading price of $2.39.
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Village Farms International, Inc.
Village Farms International, Inc. and its subsidiaries grow, sell, and distribute greenhouse-grown cucumbers, bell peppers, and tomatoes throughout North America. The business also runs CBD and cannabis-related ventures in Canada and the US. One of the biggest cannabis companies in North America is Pure Sunfarms, a fully-owned subsidiary of Village Farms. With a cannabis growing license and a Delta 2 greenhouse, Pure Sunfarms can double its output. At www.villagefarms.com, Village Farms created a new website and logo last year.
Second Quarter Financial Highlights
(Unless otherwise stated, all comparable periods are for the second quarter of 2022.)
Consolidated
- Consolidated sales decreased (7%) year-over-year to $77.2 million from $82.9 million;
- Operating loss before tax improved to ($42 thousand) compared with an operating loss before tax of ($43.8 million);
- Consolidated net loss improved to ($1.4 million), or ($0.01) per share, compared with ($36.6 million), or ($0.41) per share; and,
- Consolidated adjusted EBITDA (a non-GAAP measure) improved to $4.5 million from negative ($10.3 million).
- Canadian Cannabis (Pure Sunfarms and Rose LifeScience)
- Net sales decreased (6%) to $28.1 million (C$37.7 million) from $29.8 million (C$38.0 million) (a decrease of (1%) in Canadian dollars);
- Retail branded sales increased 24% (in Canadian dollars);
- International (export) sales increased 217% (in Canadian dollars);
- Gross margin was 38%;
- Net income was $1.2 million (C$1.7 million) compared with net income of $1.8 million (C$2.3 million); and,
- Adjusted EBITDA increased 78% to $4.8 million (C$6.7 million) from $2.7 million (C$3.4 million) (an increase of 97% on a constant currency basis).
VFF Stock Performance
VFF stock closed at $0.7975 on September 29th, up 3.57% in the last month of trading. The stock has a 52-week price range of $0.5550-$2.54 and is down 40.49% year to date. According to analysts at CNN Business, VFF stock has a 12-month median price target of $1.75 per share. In this case, this would represent an upside of 121.52%.
Canopy Growth Corporation
Canopy Growth is a well-known Canadian cannabis and cannabis-derived product company. The main markets for the company’s hemp- and cannabis-based goods are the United States, Canada, and Germany. In the United States, Canopy and Southern Glazers Wine & Spirits will begin selling CBD-infused alcoholic beverages in 2021. Canopy purchased Supreme Cannabis Company, Inc., a premium cannabis company, in order to broaden its product options in Canada. Whisl is an innovative CBD vape that can assist you in maintaining a cheerful attitude throughout the day.
Financial Highlights
- All business segments of the Company delivered sequential revenue growth in Q1 FY2024 compared to Q4 FY2023.
- Achieved cost reduction of $47 million in Q1 FY2024, bringing total cost reductions to $172 million since the beginning of FY2023.
- Consistent supply and strong demand for high-quality flower elevated the Tweed brand to the #8 rank within the total flower segment of the Canadian adult-use cannabis market in Q1 FY20241, moving up 19 places year-over-year.
- Canadian cannabis business continued its transformation to a simplified, asset-light model in Q1 FY2024, building on the divestiture of national retail operations, closure of eight cultivation facilities to focus on two purpose-built cultivation sites, and outsourcing of vape, beverage, and edible production to independent, third-party Contract Manufacturing Organizations (“CMO”).
- The Company continues to focus on simplifying its businesses and reducing cash burn; currently reviewing strategic options for BioSteel Sports Nutrition Inc. (“BioSteel”), including a potential sale of the company, to remove the cash burden to Canopy Growth as quickly as possible.
- Entities that are expected to be acquired by Canopy USA, LLC (“CUSA”) continue to demonstrate momentum, and Canopy Growth continues to work with regulators to advance its novel structure.
CGC Stock Performance
CGC stock closed at $0.7828 on September 29th, up 94.87% in the past month of trading. The stock has a 52-week price range of $0.3460-$4.77, down 66.11% year to date. According to analysts at CNN Business, CGC stock has a 12-month median price target of $0.50 per share. This estimate would be a 36.13% decrease from its last trading price of $0.7828.
Canadian Stocks to Keep an Eye On
In conclusion, the Canadian cannabis sector continues to be a gripping market for investors as we reach October 2023. Opportunities abound for those who carefully choose their Canadian cannabis stocks since the market for this product is expected to be worth $8.5 billion, and there are cross-border ripple effects from the booming US cannabis sector. But it’s important to remember that potential gains frequently come with dangers, where technical analysis and responsible risk management come into play. In addition, investors may easily navigate the volatile Canadian cannabis market by using these tools and techniques, and they can make judgments that will help them profit from the sector’s expansion.
Watch the companies featured in our watchlist and emerging trends and regulatory developments as the month unfolds. In general, staying informed and adaptable is key to success in this ever-evolving market. With the right knowledge and a strategic approach, October 2023 could be a fruitful month for those investing in Canadian cannabis stocks, offering the potential for both growth and stability in this exciting sector.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
