In the last 30 days, the price slump in the cannabis industry has accelerated exorbitantly. The market capitalization of some of the major players in this industry has fallen sharply during this period. But which of these players is currently well positioned and cheap?
Alfred Maydorn of “Der Aktionär” sees a clear consolidation with a lot of potential for the future: “Of course not all cannabis stocks will reach their old highs again, probably only very few. But these “few” will presumably even go far beyond their old record highs.
The Cronos Group has been doing more and more right lately: diversifying its product portfolio and concluding valuable partnership agreements. The current portfolio now includes cannabis plants for medical as well as recreational use, pre rollers, cannabis oils and soft gels.
With various brands for different price segments, the company also has a stable position within its target markets. In addition to the company’s home market, Canada, Cronos Group operates in Germany, Poland, Israel, Australia and Colombia.
One company is entirely dedicated to the medical use of cannabis: Aphria. It is particularly interesting to note that Aphria has a dealer, branch and site license for medical devices. These licences allow the company to own and trade cannabis and cannabis products. It also allows the ownership, production, packaging, sale, transport, delivery and testing of codeine, morphine, cocaine, cannabis and related cannabinoids.
The company’s supply contracts cover 99.8 percent of the entire Canadian population. In addition to Canada, the company operates in Germany, Italy, Malta, Australia, Lesotho, Colombia, Argentina, Jamaica and Brazil.
Another leading company in the industry is Aurora Cannabis. The Canadian company is active in both the leisure and medical segments and is broadly diversified in both areas. In particular, production capacity is currently 39.3 tonnes, but 570 tonnes have already been financed. This means that the company has already set the course for effective scaling of production.
Aside from these Canadian cannabis companies, one US-based company experienced impressive growth in the last period. Veritas Farms Inc. (OTC: VFRM), an increasingly successful producer and distributor of CBD products, demonstrates the potential of the cannabis market.
The company focuses on transparency and on offering high-quality CBD products, maintaining control over the whole supply chain. Thanks to the transparent approach to its products, Veritas just closed a groundbreaking partnership with Winn-Dixie and BI-LO supermarkets to supply CBD to 152 South Eastern stores.
Veritas Farms owns a 140-acre industrial hemp farm and facility in Pueblo, Colorado, where the nine categories of products come from. The company expands its distribution network year by year in America and now started to conquer the European and the Asian cannabis markets.
World High Life
World High Life PLC (NEX: LIFE) was founded in the UK by two experienced North-American business men, the owners of Supreme Cannabis and (TSX: FIRE) and 1933 Industries (CSE: TGIF).
The Company was incorporated on January 30, 2019 as an Investment Vehicle to identify investment opportunities and acquisitions in companies to specifically take advantage of the rapidly changing regulatory environment surrounding legal Medicinal Cannabis as well as investment opportunities within the Hemp and CBD wellness sectors.
In this respect, WHL has acquired UK’s leading CBD company Love Hemp Ltd. in a transaction involving all shares valued at 9 million GBP. With Love Hemp, WHL plans to expand into other European markets, starting with Germany in 2020.
In principle, each of these companies benefits from a further release of cannabis. The business models are scalable, diversified and larger production capacities already financed. Canadian, US and UK-based cannabis companies, like Veritas Farms and World High Life are set to dominate the global cannabis market.