3 Canadian Marijuana Stocks with an Early R&D Advantage

The Canadian marijuana stocks we’ve discovered are investing in themselves through spending on Research & Development

SmallCapPower | November 19, 2018: Research and Development (R&D) expenditures are an important metric that investors look at when analyzing companies in an early-stage, nascent industry such as cannabis. R&D expenditures can be used for a variety of purposes, including product development and testing. In an evolving industry such as cannabis, a strong brand offering is a key differentiator essential for customer retention and obtaining a competitive advantage. Strong brands can be created by providing consumers with products that are differentiated from competitors, which in turn requires R&D spending. R&D spending is also important in developing new product lines. Non-traditional cannabis products, such as cannabis-infused beverages and edibles, will require significant development and testing costs. As such, companies that currently have high R&D expenditures may sacrifice short-term earnings but may very well reap long-term rewards in the form of a more differentiated product portfolio. The Canadian marijuana stocks we’ve weeded out today all emphasize research and development.

*Market Cap and share prices as of November 15, 2018.

For Our Complete Coverage Of Canadian Marijuana Stocks Click Here   

Aurora Cannabis Inc. (TSX:ACB) – $8.75

Aurora Cannabis is a licensed producer and distributor of medical cannabis. ACB expects to have just under 1,000,000 sq. ft. of licensed production space and plans to produce at least 270,000 kilograms of cannabis annually. The Company also has 20% ownership interest in Liquor Stores N.A., the dominant alcohol retail chain in Western Canada. It intends to convert several existing outlets, as well as develop new stores, for the sale of cannabis to the recreational market. Additionally, the Company has signed a supplier agreement with the Province of Québec to supply cannabis for the province’s adult consumer market. Aurora has also embarked on an aggressive international expansion strategy that aims to have operations or sales in foreign markets such as Germany, Denmark, Italy and Australia. On October 16, 2018, the Company announced the release of its high-potency, vape-ready CBD oil product line, Aurora Cloud. The move marked Aurora as the first licensed producer (LP) to launch a vape-read, high potency CBD oil cartridges. Its R&D initiatives are further demonstrated by its June 2018 acquisition of Anandia Laboratories Inc., a leader in science, genetics, and cannabis product testing.

  • Market Cap: $8.4 Billion
  • YTD Returns: -26.0%

FSD Pharma Inc. (CSE:HUGE) – $0.43

FSD Pharma is in the process of transforming its primary facility in Cobourg, Ontario, into the world’s largest hydroponic cannabis production site. Hydroponics is a method of growing that does not use soil, which involves the submersion of the plant’s roots in a nutrient-rich solution. On September 26, 2018, Horizons completed its rebalancing of the Horizons Marijuana Life Sciences Index ETF (TSX:HMMJ) to include FSD Pharma in its consolidated holdings. The Company has entered into a strategic partnership with SciCann Therapeutics, providing FSD Pharma access to a cannabinoid scientific research platform. The platform will allow FSD Pharma to execute rigorous clinical trials to efficiently take its products to market.

  • Market Cap: $577.7 Million
  • YTD Returns: +258.3%

Tilray Inc. (NASDAQ:TLRY) – US$107.27

Tilray is a company focused on medical cannabis research, cultivation, and distribution. The Company operates internationally through its subsidiaries in Australia, Canada, and Germany. On September 13, Tilray announced it had obtained regulatory approval to export flower-based products to Germany. This supplements the oil-based products the Company already exports to Germany. On November 8, 2018, Tilray announced a definitive agreement to partner with IntelGenx Corp to produce cannabis-infused VersaFilm products. VersaFilms is a drug delivery platform that improves the bioavailability of cannabis-based medical products. As pharmaceuticals may provide higher margins than traditional recreational cannabis products, this may pay off in the form of higher earnings in the years to come. Tilray invests heavily into R&D, having carried out several clinical trials in countries including Australia and Canada.

  • Market Cap: US$10.0 Billion
  • YTD Returns: +379.1%

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

To read our full disclosure, please click on the button below:

The Content contained on this page (including any facts, views, opinions, recommendations, description of, or references to, products or securities) made available by SmallCapPower/Ubika Research is for information purposes only and is not tailored to the needs or circumstances of any particular person. Any mention of a particular security is merely a general discussion of the merits and risks associated there with and is not to be used or construed as an offer to sell, a solicitation of an offer to buy, or an endorsement, recommendation, or sponsorship of any entity or security by SmallCapPower/Ubika Research. The Reader should apply his/her own judgment in making any use of any Content, including, without limitation, the use of any information contained therein as the basis for any conclusions. The Reader bears responsibility for his/her own investment research and decisions. Before making any investment decision, it is strongly recommended that you seek outside advice from a qualified investment advisor. SmallCapPower/Ubika Research does not provide or guarantee any financial, legal, tax, or accounting advice or advice regarding the suitability, profitability, or potential value of any particular investment, security, or information source. Ubika and/or its affiliates and/or their respective officers, directors or employees may from time to time acquire, hold or sell securities and/or commodities and/or commodity futures contracts in certain underlying companies mentioned in this site and which may also be clients of Ubika’s affiliates. In such instances, Ubika and/or its affiliates and/or their respective officers, directors or employees will use all reasonable efforts to avoid engaging in activities that would lead to conflicts of interest and Ubika and/or its affiliates will use all reasonable efforts to comply with conflicts of interest disclosures and regulations to minimize the conflict.

Source link

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *