Being able to sell products at a high margin is a good sign of efficiency. Doing so leaves more cash to dedicate to other expenses and service debt obligations. Identifying undervalued companies with strong gross margins in the young marijuana industry is important, given the upcoming Canadian legalization of marijuana for recreational purposes in 2018. Today we have identified 4 Canadian marijuana stocks that have underperformed their peers despite healthy gross margins.
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1. Canabo Medical Inc. (TSXV: CMM)
Canabo Medical Inc. is engaged in the provision of medical services and non-cannabinoid products for patients suffering from chronic pain and disabling illnesses.
The Company offers:
- 10 medical clinics across Canada operated by qualified health care cannabinoid educators who consult with patients to determine the proper treatment for their ailments using medical marijuana based on the medical documentation as prepared by the physician.
The company also provides independent medical marijuana evaluations for employers and insurers and independent medical marijuana scientific research.
- Market Cap: $12.3 million
- YTD Price Change: -64.3%
- Gross Margin: 55.3%
2. Invictus MD Strategies Corp. (TSXV: IMH)
Invictus MD Strategies Corp. is a Canada-based company specializing in acquiring, funding and developing entities which are involved in the medicinal marijuana area.
The company focuses on:
- the production and distribution of medicinal marijuana through online stores;
- the sale of hydroponic equipment and fertilizers, as well as of accessories for cannabis intake:
The company also does research and testing and provides advisory services.
- Market Cap: $46.1 million
- YTD Price Change: -25.8%
- Gross Margin: 44.6%
3. CanniMed Therapeutics Inc. (TSX: CMED)
CanniMed Therapeutics Inc. is a Canada-based plant biopharmaceutical company that:
- specializes in the production of pharmaceutical-grade cannabis;
- offers a range of pharmaceutical-grade cannabis products:
- provides a plant biotechnology research and product development program focused on the production of plant-based materials for pharmaceutical, agricultural and environmental applications.
The Company, through its subsidiary CanniMed Ltd, offers medical cannabis oils, dried medical cannabis, vaporizers, vaporizer parts and accessories. Its CanniMed Oils are made using only dried cannabis flowers.
- Market Cap: $218.1 million
- YTD Price Change: -10.5%
- Gross Margin: 22.9%
4. Organigram Holdings Inc. (TSXV: OGI)
Organigram Holdings Inc., a Canada-based company, is a licensed medical marijuana producer as regulated by Health Canada under the Marijuana Medical Access Regulations (MMAR) of the Government of Canada.
- Market Cap: $277.6 million
- YTD Price Change: -7.6%
- Gross Margin: 54.1%
Related Articles from the munKNEE.com Vault:
Investing in marijuana-related stocks is a high-risk, high-reward game due to all the uncertainties surrounding the legalization of the drug. Companies that do succeed, however, have potential to bring large capital gains. That being said we have identified five Canadian marijuana stocks with the biggest upside potential, according to consensus analyst price targets.
The search is now on for the next junior marijuana stock that is ripe for acquisition. Will it be one of the 5 we’ve identified based upon their high revenue growth profiles?
The following 5 marijuana stocks are expected to experience anywhere from 188% to 5,338.8% (yes, 5,338.8%!) in revenue growth during the upcoming year.
With intraday fluctuations of up to 80% – yes, 80% – the Canadian marijuana stocks on our list create significant day-trading opportunities for those so inclined.
With operations in the U.S. or a high probability of expanding there, the Canadian marijuana stocks on list are likely going to continue to feel a buzz from the recent U.S. election.
A recent United Nations report on drug use reveals drug trends around the world, including which countries have the highest rates of cannabis use. Check out the map.
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