The marijuana landscape is transforming before our eyes. What had once been an industry that politicians swept under the rug is now considered mainstream throughout most of North America and Europe. Canada became the first industrialized country to legalize recreational weed this past October; Mexico stands ready to give adult-use pot the green light within the next few months; and two-thirds of all U.S. states have OK’d medical marijuana in some capacity, even as the drug remains illicit at the federal level.
But with Canada being the first developed country to give marijuana the full green light, it and its pot growers have received the undivided attention of Wall Street and investors. After all, Canada’s pot industry could grow from just a few hundred million dollars in annual sales to perhaps $6 billion in a matter of four or five years…
All eyes are on Canada’s top cannabis growers
Heading that industry are a number of familiar and popular names on Wall Street: Aurora Cannabis (NYSE:ACB) and Canopy Growth (NYSE:CGC).
Aurora Cannabis, the second-largest pot stock by market cap, projects as the largest producer by peak annual output. Already on track for an annual run rate of more than 150,000 kilos a year, the company in early April guided for at least 625,000 kilos per year (on a run-rate basis) by the midpoint of 2020. This assumes that its flagship Aurora Sun campus, spanning 1.62 million square feet, comes online and produces at least 230,000 kilos a year, and that Aurora’s Exeter facility and Nordic 2 campus are also complete, licensed, and planted, by that time. It wouldn’t take but modest expansion of Aurora’s 14 grow properties to push past 700,000 kilos in eventual annual yield.
Then there’s Canopy Growth, the largest marijuana stock by market cap, and Canada’s projected second-largest grower. Although Canopy has been pretty secretive about its peak output number, it should be easily able to surpass 500,000 kilos with the 5.6 million square feet it’ll eventually be devoting to cultivation. Assuming it simply matches the industry average of 100 grams per square foot, somewhere around 560,000 kilos annually is possible.
After Aurora and Canopy it becomes a two-way race for third between Aphria (NYSE:APHA) and CannTrust Holdings (NYSE:CTST). Aphria has stood firm on expecting 255,000 kilos of peak yield once all three of its campuses are licensed and at full capacity. Right now, Aphria Diamond, a facility capable of 140,000 kilos a year, is still awaiting licensing.
Meanwhile, CannTrust’s additional capacity of 100,000 kilos to 200,000 kilos of outdoor-grown marijuana will double or triple its previous peak output to between 200,000 kilos and 300,000 kilos. Depending on how much outdoor pot CannTrust produces from the aggregate 200 acres of land it expects to acquire will determine which company is Canada’s No. 3 grower…or so we think.
This unknown pot stock wants to become Canada’s No. 3 grower
In January, Zenabis Global (NASDAQOTH:ZBISF) was formed out of a reverse takeover of Bevo Agro by Sun Pharm Investments. Like other growers, it has aspirations of becoming a big-time marijuana player. But unlike most middling mid-tier growers, it now looks to have the funding and cultivation space to make it happen.
According to Zenabis Global’s management team, the company expects to…
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