Marijuana stock CannTrust Holdings remains one of the only medicinal cannabis companies whose stocks has steadily made money in the last three quarters reports their first-quarter findings.
In two weeks, Canada’s Senate will vote on the issue of adult-use of recreational marijuana. This decision is estimated to have a substantial influence on the country’s internal economy. The whole world will be watching as Canada becomes the only developed country thus far to legalize recreational weed. Medicinal growers and black-market sellers alike are anticipating this breakthrough for the rapidly growing industry. Licensed growers are currently competing to purchase more and more production space and expand their facilities in the hopes that it will make them better candidates for long-term supply deals. This move is projected to be of future help to companies in terms of surplus supply, but reinvesting all available profit into their expansion plans seems to be backfiring in the short-term. Stocks are losing money. CannTrust stocks, however, saw an almost 200 percent increase from last year.
The Ontario-based producer has more than 40 years of pharmaceutical experience and raked in almost $6.1 million over the last twelve months. CannTrust’s active patient registry increased at the end of the quarter by 186 percent. The supplier has recently shifted product focus to cannabis-laced oils. Although this product is geared to a significantly smaller market, because it is targeted at a consumer with such specific needs, they have higher returns. In the first quarter, CannTrust’s earnings from cannabis oil products were three times higher than that generated from last year’s $3.47 million. This left the company with a yield of C$0.12-per-share.
CannTrust is becoming a favorite for animal lovers and environmentalists alike with its latest vegan hard shell capsules having been introduced to the market last month. This move, which removes the need for animal by-product gelatin capsules, is likely hailed by these such animal lovers. This product will also enable users to give themselves proper dosage. Additionally, they announced that they would be partnering with Grey Wolf Animal Health to support research and product development that promotes overall pet health.
Like other medicinal growers, CannTrust is looking to expand its production space. Why, then, is it seeing greater returns than companies doing the same? The answer to their consistent performance must lie with their quick decision-making process. They are currently working to grow their Niagara Greenhouse base. Upon completion, this expansion will give the company one million additional feet in production space. As initial construction was underway, they were forced to move their products from the Niagara base to be housed in their Langstaff site. Because this facility is considerably smaller, CannTrust would not be able to produce at their usual rate. Instead of accepting this defeat, they bought product from third-party suppliers. Other hemp companies are not likely to have taken this route. All CannTrust construction is reportedly running on time and within financial margins so far.
As we near the voting date for legalization, it is important to remember that the market is uncertain. The overflow of supply and fierce competition are likely to result in price drops, and the hopes of trade with foreign markets can only account for so much. Because CannTrust has a greater vested interest in oil-based products, this surplus of dried products on the market is estimated to not be as devastating for them as it will be for the company’s larger competitors. Performance and innovation in mind, CannTrust seems to be an underdog climbing the ladder of success, but like with all other stocks it has its risks.
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