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But what you may not realize is that while many major legal players have a multi-billion dollar market cap, they do not all match what a large cannabis company could do. look like. At present, three penny marijuana stocks should play a very important role in the Canadian pot industry.
A close-up view of a plant of cannabis growing in flowers growing inside.
Source of the image: Getty Images.
<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Auxly Cannabis Group "data-reactid =" 34 ">Auxly Cannabis Group
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Auxly Cannabis Groupof (NASDAQOTH: CBWTF) market capitalization of $ 355 million, at the close of Wednesday, July 3, is hardly pedestrian. However, its share price of 0.60 USD 60 cents), does not exactly fit the definition of a company for which you expect to be a leader in the field of cannabis. But rest assured, Auxly may very well be the real deal"data-reactid =" 35 ">Auxly Cannabis Groupof (NASDAQOTH: CBWTF) market capitalization of $ 355 million, at the close of Wednesday, July 3, is hardly pedestrian. However, its share price of 0.60 USD 60 cents), does not exactly fit the definition of a company for which you expect to be a leader in the field of cannabis. But rest assured, Auxly may very well be the real deal.
<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Until the middle of 2018, Auxly Cannabis Group In the United States, Auxly provided cash to producers in exchange for future cannabis production at a below-market price, which would allow the company to sell that product, or a dried flower derivative (data, oils, food products, infused beverages, topical products, etc.), at the full market rate, thus pocketing the difference as a profit. "data-reactid =" 36 "> Until about mid-2018, Auxly Cannabis Group was just like precious metals royalty companies pay money to their license partners in exchange for metals mined at a lower price than In the marketplace, Auxly paid producers money in exchange for future cannabis production at a below-market price, which would allow the company to sell the product, or a dried flower derivative (eg, oils, food products, infused beverages, topical, etc.), at the market rate, thus pocketing the difference as a profit.
Auxly changed its approach about a year ago, mainly because the royalty model did not leave much room for maneuver to reduce costs, but also because it would further help the company control its supply. She still has contracts with more than a dozen licensed producers, but she also has a joint venture and wholly-owned crop projects in her portfolio. In total, Auxly will control – and by control, I mean put on the market through its license partners, joint ventures and wholly-owned farms – about 170,000 pounds per year. There may be only five or six individual pot producers with a greater presence of marijuana at retail in Canada.
<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "There are two reasons why the stock of Auxly has received little investor love. it was released a lot of actions raise funds to fund licensing agreements and expansion of wholly owned culture. These equity issues tend to be dilutive for existing shareholders. "Data-reactid =" 38 "> There are two reasons why the action of Auxly has aroused little investor interest.First, she issued a lot of money. to raise funds to fund its wholly-owned crop expansion license operations.These share issues tend to be dilutive to existing shareholders.
Second, the company has made it clear that it will delay its short-term dried flower sales in favor of higher margin derivatives later this year. Derivatives will go on sale at the earliest in mid-December. Although this is a positive long-term result for Auxly, this expectation has hurt the company's short-term operating results.
Despite its tiny stock market, Auxly is the product of a major Canadian marijuana company.
A dollar sign shadow is projected on a pile of cannabis leaves.
Source of the image: Getty Images.
<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Zenabis Global "data-reactid =" 66 ">Zenabis Global
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Starting last wednesday, a share of Zenabis Global (NASDAQOTH: ZBISF) You could get for only $ 1.45, which is the type of pocket money that we probably hang out in our sofa cushions. But as with Auxly, you can not judge a book on its cover. "Data-reactid =" 67 "> From last Wednesday, a share of Zenabis Global (NASDAQOTH: ZBISF) You could get for only $ 1.45, which is the type of pocket money that we probably hang out in our sofa cushions. But as with Auxly, you can not judge a book on its cover.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Zenabis, whose market capitalization is respectable 288 million dollars, currently in as one of the 10 largest individual producers in Canada. According to a company presentation to investors, Zenabis Global plans to produce 131,300 kilos on an annual basis by August 2019. The bulk of this production will come from the company's maximum production campus at Atholville, at New Brunswick (Data-reactid = "68"> Zenabis, which has a respectable market capitalization of $ 288 million, is currently listed in the list of investors. According to a presentation by the company to investors, Zenabis Global plans to produce 131,300 kilos on an annual basis by August 2019. The bulk of this production will come from maximum production The company's Atholville campus in New Brunswick (34,300 kilos) and developing its future Langley's flagship campus in British Columbia (96,100 kilos).
<p class = "canvas-atom-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "What is really remarkable about Zenabis Global, c is that it could The Langley campus is based on a 2.1 million square foot parcel of land that, if it is built, could accommodate up to 426,000 kilos of annual output, according to estimates of the company. This would allow Zenabis to achieve a peak capacity of more than 479,000 kilograms if it chose to fully develop its Langley campus. In addition, with the recent announcement by the company that initial production exceeded the nominal capacity of a two-digit percentage during four of the first five months of 2019 (January to May), these production estimates robust could be prudent. & Nbsp; "Data-reactid =" 69 "> What is truly remarkable at Zenabis Global is that it could only be the beginning of its annual production.The Langley campus rests on a plot of 2, 1 million square feet which, if it is built, could accommodate up to 426,000 people.According to company estimates, Zenabis is expected to reach more than 479,000 kilograms of peak capacity if it decided to fully develop its Langley campus.In addition, the company recently announced that its initial production far exceeded the two-digit percentage design capacity in four of the first five months of 2019 (January-May), these Robust production estimates can be cautious.
In addition to a significant production, Zenabis also has two processing facilities that, when fully utilized, offer an annual extraction capacity of 183,600 kilos. Given that derivatives should play such an important role in the growth of the marijuana sector in Canada, the company's focus on portfolio diversification should have a positive impact on its operating margins. .
Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Clearly, Zenabis has a lot of work to do the job. brand and make itself known in a densely populated area, but a wholesale deal worth nearly $ 23 million was announced last week with Tilray& nbsp; it's a good start. & nbsp; This is definitely a name to watch for investors. "data-reactid =" 71 "> It is clear that Zenabis has a lot of work to do to give a brand and build a name in a wholesale market worth nearly $ 23 million announced last week with Tilray This is a good start. This is certainly a name to watch for investors.
A doctor with a stethoscope around his neck holding a cannabis bag in his left hand and cannabis oil capsules in his right hand.
Source of the image: Getty Images.
<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Aleafia Health "data-reactid =" 93 ">Aleafia Health
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Another pot stock that may not seem much like surface, but is actually a great player, is Aleafia Health (NASDAQOTH: ALEAF). Aleafia closed Wednesday with a share price of $ 1.01 and a market capitalization of $ 265 million. "Data-reactid =" 94 "> Another pot stock that may not seem like much on the surface, but is actually a big player, is Aleafia Health (NASDAQOTH: ALEAF). Aleafia closed on Wednesday with a stock price of $ 1.01 and a market capitalization of $ 265 million.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Earlier this year, Aleafia completed a transformation acquisition who saw him buy the emblem as part of a transaction entirely in shares. What made this merger so interesting is how similar the business models of these two companies were before they were merged. They both ran health and wellness clinics, as well as their own cannabis farms. "Data-reactid =" 95 "> Earlier this year, Aleafia completed a transformation acquisition that allowed it to buy Emblem as part of an all-equity contract. These two companies were similar in business before they were merged: they operated health and wellness clinics, as well as their own cannabis farms.
The idea behind the clinic model is that it allows a company to prescribe marijuana for medical purposes to patients who could benefit from it, and then (hopefully) to keep these patients in the network. selling them products in jars to the brand. Although recreational weeds are a much larger market than medical marijuana, medical patients tend to consume cannabis more frequently, to buy it more often and are much more likely than adult consumers to use cannabis. use high margin derivatives. This makes medical patients a product of choice, even with a legalized recreational pot in Canada.
Since the merger of their two companies, the new company Aleafia Health has forty health and wellness clinics and has the capacity to produce 138 000 kg of cannabis per year, at full operating capacity (98 000 kg of Aleafia and 40,000 kg of Emblem). Like Zenabis, these 138,000 kilograms place Aleafia Health among the top 10 producers in Canada.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The big question mark This is how Aleafia Health will move so much grass when it has focused mainly on medical patients. The company recently obtained a license from Health Canada to export cannabis-based products, including high-margin oils, to Australia, but will likely require significant supply contracts in Canada and any Europe to avoid any pressure on its margins. Nevertheless, like other penny stocks of marijuana here, this deserves a closer inspection. "Data-reactid =" 98 "> The big question is how Aleafia Health will move so many weeds when it focuses primarily on medical patients." The company has recently obtained a license from Health Canada to export cannabis products, including high-margin oils, to Australia, but there will likely be significant supply contracts in Canada and throughout Canada. Europe to avoid any pressure on … Marijuana Penny Stocks Here, it's worth a closer look.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " More from The Motley Fool "data-reactid =" 99 "> More from The Motley Fool
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Sean Williams has no position in any of the actions mentioned. The Motley Fool recommends Auxly Cannabis Group. The Motley Fool has a disclosure policy."data-reactid =" 104 ">Sean Williams has no position in any of the actions mentioned. The Motley Fool recommends Auxly Cannabis Group. Motley Fool has a disclosure policy.
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