Kalkine Media explores 5 TSX pot stocks to watch in November

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 Kalkine Media explores 5 TSX pot stocks to watch in November
Image source: © Pichitbo | Megapixl.com

Highlights

  • Cronos Group Inc. reported Q2 2022 net revenue of US$ 23,061 million.
  • Tilray recently announced distribution agreement with Republic National Distributing Company.
  • In Q3 of fiscal 2022, Organigram Holdings Inc. noted gross revenue of C$ 55.2 million.

The cannabis industry in Canada has seen both ups and downs in the past few years. Many of these companies have made the cut by obtaining the required licenses and engaging in product and brand expansion. With their rapid growth and timely developments, they have gained their share of the market.

With the growth in the sector, governments at a global level are moving towards legalizing the use of Cannabis. The S&P/TSX Cannabis Index witnessed a QTD (quarter-to-date) increase of 24.84 per cent and had an adjusted market capitalization of C$ 8.751 billion at the time of writing.

Reportedly, Senate Majority Leader Chuck Schumer highlighted that the Congress will likely pass the marijuana bill that includes provisions to provide legal businesses to have access to banking services. SAFE banking may lead to a transformation in the cannabis industry as it would bring in more demand. 

As an investor, look at the stock’s past and present performances along with their company valuations. Sector growth and stock growth are different concepts and should be taken that way. Ensure to go with deep research of your stock and the market. This will facilitate understanding your portfolio in an effective way.

Here, we explore five cannabis stocks and their recent performances:

  1. Cronos Group Inc. (TSX: CRON)

Cronos Group is engaged in selling and cultivating recreational and medicinal cannabis. It is headquartered in Toronto and operates under the medicinal brand name, Peace Naturals. In addition to this, there are two other recreational brands owned by the company-Cove and Spinach.

In Q2 2022, Cronos Group’s net revenue was reported at US$ 23,061 million compared to US$ 15,622 million in Q2 02021. The gross profit also rose to US$ 4,120 million from a loss of US$ 15,784 million for the same period in the prior year.

The company's stock witnessed a QTD increase of 17.57 per cent along with an increase of 13.18 per cent in the last five days.

  1. Tilray Brands Inc. (TSX: TLRY)

Tilray is a firm that cultivates and is a seller of medical and recreational cannabis. In 2021, legacy Tilray was acquired by legacy Aphria which was a reverse merger and renamed itself Tilray.

For Q1 2023 the net revenue of the company fell to US$ 153.2 million from US$ 168.02 million at the same time of the previous year.

There was a decline in the gross profit which was recorded at US$ 48,614 million from US$ 50,955 million for the same competitive period. The company saw an MTD (month-to-date) increase of 46.05 per cent.

On September 22, 2022, the company announced that its subsidiary FL Group S.R.L. received approval from the Italian Ministry of Health to distribute and import its medical cannabis oral solution THC25 across Italy.

On September 8, 2022, Tilray Brands announced the distribution agreement with Republic National Distributing Company.

The picture below shows the total market capitalization of CRON, TLRY, WEED, OGI, ACB

  1. Canopy Growth Corporation (TSX: WEED)

Canopy Growth Corporation deals in recreational cannabis and is engaged in its selling and cultivation. The company has its headquarters in Smiths Falls. Primarily, the company operates in Canada but has its production and distribution licenses in more than a dozen countries. This facilitates the company in its expansion plans in global medical cannabis.

In Q1 2023, Canopy Growth's net revenue was reported to C$ 110.1 million and witnessed a decline of 19 per cent. The EBITDA is reported with a loss at C$ 75 million which was a decrease of 18 per cent.

As of June 30, 2022, there was a decline in the total assets and were reported at C$ 3,517,527 million from C$ 5,615,050 million at the same time of the last year.

On October 25, 2022, the company announced that it has entered into an arrangement agreement with Canopy Growth Corporation and Canopy USA, LLC.

  1. Organigram Holdings Inc. (TSX: OGI)

OrganiGram Holdings Inc. operates as a licensed producer of cannabis products and is based in Canada. Primarily, the company caters to adult recreational consumers and patients with its indoor-growth cannabis.

Organigram Holdings includes a single segment i.e., Cannabis production with its brand portfolio- Trailblazer, Edison Reserve, ANKR Organics and Edison Cannabis Co.

In Q3 of fiscal 2022, the gross revenue achieved by the company was noted at C$ 55.2 million which was an increase of 26 per cent higher than Q2 fiscal 2022.

The net revenue was reported at C$ 38.1 million which was an increase of 88 per cent from the year-ago quarter. The adjusted EBITDA grew to C$ 583.

  1. Aurora Cannabis Inc. (TSX: ACB)

Aurora Cannabis is involved in selling and cultivation of recreational and medicinal cannabis and is headquartered in Edmonton, Canada. The brands of the company include- San Rafael '71, Aurora, Daily Special and CanniMed, MedReleaf, etc.

In Q4 2022, Aurora Cannabis’ net revenue was reported at C$ 50.2 million versus C$ 50.4 million in Q3 2022. The net loss was noted at C$ 618.8 million compared to C$ 134 million in the corresponding quarter in 2021. The cash rose to C$ 488,779 million compared to C$ 480,552 million in Q3 2022.

On August 25, 2022, the company stated its acquisition of controlling interest in Bevo Agtech Inc.

On May 5, 2022, the company announced the completion of its acquisition of TerraFarma Inc.

Bottom Line:

Pot stocks occupy a significant share in the market and should be operated with a long-term approach. Before investing, study the fundamentals and analyze the stocks’ movements carefully. Many investors do not pay heed to the past performances.

Make sure to look at the overall picture before selecting your stocks. In addition to this, implement the diversification factor to your portfolio and be prepared. Market works in a certain yet in an uncertain way. Be ready for the fluctuations and form your risk minimization strategy to stay relevant in the long run.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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