Top Canadian Cannabis Stocks In Q4 2021
Now in September, most top marijuana stocks are trading near their lowest price points in 2021. Since the pandemic began the best cannabis stocks saw some significant upside in 2020 and the first quarter of 2021. Now for the past seven months, we have seen a substantial decline in value for the cannabis sector. But many cannabis investors believe it’s only a matter of time before we see the federal government start implementing cannabis reform.
In many ways, this would bring back more investors into the cannabis sector and start some upward momentum. One area that was hit particularly hard in 2021 has been the Canadian cannabis stocks. At the present time, Canadian cannabis companies have been planning their entry into the US cannabis market for quite some time. The US cannabis market is expected to more than double in the next five years. A recent report by Facts & Factors shows the global legal marijuana market size growing from $22 billion in 2020 to $97 billion by 2026.
Once the US ends cannabis prohibition on the federal level many Canadian cannabis companies have plans in place to enter the American market. For investors, it could be a good time to start watching these top pot stocks and how they perform in the market. From current levels, these marijuana stocks could see some upside with an announcement from Congress about cannabis reform.
Investing In Top Pot Stocks Under Current Market Conditions
For investors doing your own research and finding the companies with strong financials and a good chart setup can help you establish the most returns. In general, top marijuana stocks are known for having significant market volatility. This could make Canadian cannabis stocks a good opportunity for short-term gains. In September some of these stocks are trading at the lowest values they have seen in 2021. We could see further pullbacks in September as more investors look for other areas of the market for returns. As we head into next week let’s look at 3 top Canadian marijuana stocks for your list next week.
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Best Canadian Marijuana Stocks For Your Watchlist In September
- Canopy Growth Corporation (NASDAQ:CGC)
- Cronos Group Inc. (NASDAQ:CRON)
- OrganiGram Holdings Inc. (NASDAQ:OGI)
Canopy Growth Corporation
Canopy Growth is one of the largest producers and distributors of cannabis and cannabis-derived products in the Canadian market. At the present time, the company sells cannabis and hemp-derived products in Canada, the US, and Germany. Recently, the company made a US distribution agreement with Southern Glazers Wine & Spirits for a CBD beverage portfolio. In addition, in the Canadian market Canopy increased its brand portfolio with the acquisition of one of the countries premium cannabis brands The Supreme Cannabis Company, Inc.
In August Canopy released its first-quarter fiscal 2022 financial results with 23% growth in Q1 2022 compared to Q1 2021. Specifically, the company is reporting net revenue of $136 million in Q1 2022 driven by strong double-digit growth across Canada. Canopy reported total net cannabis revenue of $93 million in Q1 2022 an increase of 17% from the prior year. In addition, other consumer products revenue was $43 million. Currently, net earnings in Q1 2022 are $390 million of which $518 million was driven by other income totaling $581 million during Q1 2022. The company saw an adjusted EBITDA loss in Q1 2022 of $64 million an improvement from Q1 2021.
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Cronos Group Inc.
Cronos Group Inc. is a global cannabinoid company with international production and distribution across five continents worldwide. Currently, Cronos has created a portfolio of cannabis brands that’s successful with Canadian cannabis consumers. Recently, Cronos announced it purchased options to acquire a 10.5% stake in PharmaCann for $110.4 million. The deal will be executed under various factors including the status of US federal cannabis legalization. Specifically, the deal would involve PharmaCann’s six production facilities and 23 dispensary locations. In July the company launched a line of new dual flavor cannabis gummies. These new gummies are said to have an unparalleled taste for adult consumers.
In August Cronos missed earnings estimates on their second-quarter 2021 results. Specifically, the company produced net revenue of $15.6 million in Q2 2021 up by $5.7 million year over year. Notably, Cronos sustained a gross loss of $15.8 million in Q2 2021 increasing by $12.9 million year over year. The company attributes the loss to an increase in inventory write-downs in the ROW segment. Specifically, this totaled $12 million in Q2 2021. As it stands, the company has an adjusted EBITDA loss of $49.8 million in Q2 an increase of $22.8 million from Q2 2020.
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OrganiGram Holdings Inc.
In Canada, OrganiGram Holdings Inc. is one of the leading licensed producers of cannabis and cannabis-derived products. Primarily, the company produces high-quality, indoor-grown cannabis products to both the medicinal and recreational markets. Right now, Organigram is strategically developing its international business partnerships increasing the company’s presence in the global market. In addition, the company is also growing its wholesale shipping of cannabis and sells products online. Recently, Organigram extended its SHRED product portfolio with high quality, SHRED’ems Gummies. Also, the company launched Edison JOLTS Canada’s first flavored high potency THC ingestible extracts.
OrganiGram has produced 84 new SKUs since July 2020 as a part of revitalizing its products portfolio. Notably, this includes two new high potency strains under the higher-margin Edison brand in Q3. In its latest report, Organigram saw third-quarter fiscal 2021 results with gross revenue up 51% sequentially to $29.1 million. Primarily, the company grew its adult-use recreational net revenue by 40% sequentially to $16.8 million in Q3 2021. As it stands, the company expects sequentially higher revenue and improved adjusted gross margins in Q4 2021. Additionally, the company expects to launch more than 20 new SKUs before the end of Q4 2021.
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