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Summary
- The year-to-date (YTD) return of S&P/TSX Cannabis Index is over 30 per cent.
- This comes after cannabis sales hit record numbers, amounting to about C$ 2.62 billion, in 2020.
- While cannabis revenue reportedly dipped by over five per cent in January 2021, it is still said to be almost twice of what was clocked in January 2020.
The year-to-date (YTD) return of S&P/TSX Cannabis Index is over 30 per cent. This comes after cannabis sales hit record numbers, amounting to about C$ 2.62 billion, in 2020.
While cannabis revenue reportedly dipped by over five per cent in January 2021, it is still said to be almost twice of what was clocked in January 2020. Plus, experts believe that the federal legalization of recreational marijuana in the US will boost the market significantly when it happens.
Let’s dive deep to explore two pot stocks that grew over 50 per cent this year – Canopy Growth Corporation (TSX:WEED) and HEXO Corp. (TSX:HEXO).
Source: Pixabay
Canopy Growth Corporation (TSX:WEED)
Headquartered in Smiths Falls, Canopy Growth focuses on the business of cultivating and selling medicinal cannabis and hemp. The C$13-billion market cap company has a price-to-book ratio of 3.304.
Canopy stock’s return in the last six months stood at nearly 27 per cent, while it posted a year-to-date (YTD) growth of roughly 55 per cent.
In April 2021, Canopy signed an agreement with Southern Glazer's Wine & Spirits for the distribution of CBD-infused beverages in the US. Earlier this month, it also acquired The Supreme Cannabis Company Inc, a globally diversified cannabis company, and Ontario pot brand AV Cannabis Inc.
Canopy Growth’s net revenue stood at C$ 153 million in Q3 2021, while its net loss was C$ 829 million.
HEXO Corp (TSX:HEXO)
HEXO Corp, headquartered in Ottawa, develops and markets cannabis products. It has a market cap of over C$ 870 million and its stock has a P/B ratio of 1.609.
HEXO stock returned over 71 per cent in last six months. Its YTD growth records a notable 125 per cent climb.
In mid-April 2021, the company filed a C$ 1.2 billion preliminary base shelf prospectus. In the same month, Truss Beverage Co, a joint venture between HEXO and Molson Coors Canada, included six new products in its cannabis-infused beverages portfolio. In March 2021, Southern District of New York dismissed class action suit against HEXO that alleged irregularities in material information to investors.
In the second quarter of fiscal 2021, HEXO’s net revenue jumped to C$ 32.8 million, recording a growth of 94 per cent YoY.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.
