5 cannabis stocks tapping international markets to drive growth

Twitter icon

Read entire article here.

Although most people think about the US or Canada when it comes to the cannabis industry, it is important to understand how the industry is advancing in emerging markets across the globe.

The last few years have been significant for the international cannabis industry and we have seen several countries approve legislation to legalize medical cannabis. Going forward, we expect this trend to become even more significant and this is something that investors need to be aware of.

From the European Union (EU) to Australia, from South America to Africa, there is a lot to be excited about as it relates to the international cannabis opportunity. Today, we want to highlight 5 cannabis companies that are focused on the international opportunity and these are opportunities that our readers should be watching.

Canrim Growth Group: Has an Early Mover Advantage in Asia

Canrim Growth Group is a private company that has as an early mover advantage on the cannabidiol (CBD) market in Asia and this is an opportunity that we are excited about. When compared to North America and Europe, we believe that Asia represents a massive untapped opportunity and we are bullish on this market due to its sheer size.

There are a number of reasons to be bullish on Canrim and we are most excited about the opportunity due to the structure of the business, the strength of the management team, and the amount of potential catalysts that it has for growth. We believe that Canrim is well positioned to execute on an emerging CBD market that is not saturated, and we find this to be significant.

Canrim is comprised of two portfolio companies, CBD Group Asia (CGA) and Natural Source Group (NSG), that provide direct exposure to strategic Asian markets (China, Hong Kong, Singapore, and Thailand). CGA is a distribution and investment company focusing on China’s high growth CBD market. With regards to NSG, Canrim has an exclusive, commercial arrangement to distribute co-branded CBD products across Asia via NSG’s platform.

We are favorable on the amount of value that can be created through these assets and will monitor how the management team is able to drive the story forward. CGA has already secured strategic partnerships with successful North American brands to sell their products in Asia and we are bullish on the growth prospects associated with this.

When looking at the Asian CBD opportunity from a legislative standpoint, we believe that the market is moving in the right direction. Currently, CBD infused cosmetics for the retail market are the only product range legal for sale in China. Cannabis has also made significant strides in Thailand, South Korea, Japan, Hong Kong and Sri Lanka, and this is a trend that we are closely watching

If you analyzed the international markets (outside of the US) that have received the most attention from cannabis businesses, you would notice that most of the activity is in the EU and in Latin America. We are bullish on the opportunity in Asia and believe that Canrim is well positioned to capitalize on this emerging market. According to Hong Kong based investment company Regent Pacific Group, the CBD market in China is expected to be a US $15 billion market by 2024.

Canrim is led by a management team that is comprised of international business and capital markets experts who are committed to aggressive cost-effective growth. Over the next year, we expect to see Canrim benefit from the strategic relationships that are in place from a distribution standpoint. The portfolio companies that fall under the Canrim umbrella have attractive growth prospects and this is an opportunity that we are excited about.

Canopy Growth is in the Middle of a Major Transition

Canopy Growth (WEED.TO) (CGC) is one of the best-known cannabis companies and this is an opportunity that we have been closely following since 2014. The Canadian cannabis producer was once considered to be the bellwether of the sector but has had a tumultuous year and has been under considerable pressure.

A few months ago, Canopy Growth fired Bruce Linton as CEO and Chairman and this put additional pressure on the business. The decision to fire Bruce was made by Constellation Brands (STZ), which invested approx. $4 billion in Canopy Growth. Constellation Brands owns several leading alcohol brands and has massive distribution and infrastructure in markets all over the world.

Before Constellation Brands announced the decision to fire Bruce, Canopy Growth was executing on all cylinders and was highly focused on gaining market share in strategic international markets. The Canadian cannabis producer has planted its flag in several of the most exciting cannabis markets and we are bullish on the growth prospects associated with this strategy. Over the next year, we expect to see Canopy report increasing revenues from these markets and this is a trend to be watching.

Last month, Canopy Growth reported a major divesture and announced that it would be selling its position in Auscann Group Holdings Ltd (ASX: AC8) (ACNNF: OTC). During the last year, Canopy has made a series of investments and acquisitions to enhance its leverage to the international cannabis market. By selling its position in Auscann at a more than 50% discount (to the price of the stock at the time of the transaction), Canopy seems to be telling the market that it will start to focus on specific cannabis markets.

Canopy Growth appears to be in the middle of an interesting transition following the firing of Bruce Linton and this an opportunity that we are closely watching. During the last month, the Canadian cannabis producer has been under heavy pressure and we believe that the company has substantial prospects.

Asterion: An Emerging Play on the Australian Cannabis Market

Since we are on the subject of Australia, we want to highlight a private company that is highly focused on this emerging market. The company, Asterion Cannabis Inc. is a fully integrated Canadian medicinal cannabis company with a wholly owned Australian subsidiary, Asterion (Australia) Pty Ltd. The company is focused on being a leader in and advancing cannabis agriculture, producing the highest quality, lowest cost, genetically uniform cannabis strains.

Asterion is led by a management team that has a proven track record of success and of highly experienced executives with successful track records managing projects spanning the globe – North America, Europe, the Middle East, and Asia-Pacific.

Asterion is developing a large-scale medical cannabis cultivation, research and manufacturing facility. The state-of-the-art cultivation facility will have a research center and onsite EU-GMP manufacturing for the company’s end product. The facility will be located on a 40 hectares property that offers the company significant room to expand. We are bullish on the growth prospects associated with the facility and will monitor how the management team is able to drive the story forward.

The Australian federal government granted Asterion’s Toowoomba project Major Project Status. This represents a major accomplishment for the business, and we expect this to play a key role in the success of the operation. We believe that this designation puts Asterion in a class of its own and this is a private opportunity to be watching.

Australia is an attractive cannabis market and we are favorable on Canopy Growth’s decision to enter the market. Asterion represents an emerging opportunity that is led by a management team with a proven track record and we believe that the company has substantial growth prospects. Asterion is an opportunity that has been flying under the radar and is one to be watching.

Aleafia Health: A Domestic and International Execution Story

Aleafia Health (ALEF.TO) (ALEAF) is a leading Canadian cannabis producer that has been capitalizing on strategic international markets. From Australia to Germany, the company has been executing flawlessly on a global expansion strategy and we believe that the market does not fully appreciate this aspect of the story.

When it comes to the international cannabis opportunity, Aleafia Health is in the early stages of its expansion strategy. Earlier this year, the company acquired Emblem and we viewed this as a transformational acquisition for the business. The acquisition significantly enhanced Aleafia Health’s leverage to the EU and we expect to see the company report strong growth in 2020 and beyond.

In May, Aleafia Health entered the German medical cannabis market by expanding the scope of Emblem’s joint venture with German pharmaceutical wholesaler and logistics company Acnos Pharma GmbH. The company owns 60% of the joint venture and will leverage Acnos’ supply chain network which includes access to approximately 20,000 pharmacies and 110 distribution centers in the world’s largest medical cannabis market.

Earlier this year, Aleafia Health planted its flag in the Australian market through an investment in CannaPacific (owns 10% of the operation). A few months ago, Aleafia Health successfully secured export and import permits allowing for its first international product shipment to be distributed by CannaPacific. This investment has already proven to be beneficial to the business and we expect to see ramping revenues from the Australian market.

We believe that Aleafia Health represents a compelling play on the burgeoning global cannabis market, and this is an opportunity to be watching. Only a few months ago, the company received a positive upgrade from Eight Capital which issued the company a Buy rating and a $3 price target. As Aleafia Health continues to execute, we expect to see more broker-dealers start to covering the story and we will be closely monitoring this opportunity.

Blueberries Medical: A Latin American Growth Story

Latin America has been a major beneficiary of the legal cannabis movement and this is a trend to be aware of. Over the last year, we have seen a significant increase in the number of companies that are levered to this market and believe that selectivity is key when it comes to this opportunity.

Blueberries Medical Corp. (BBM.CN) (BBRRF) has been laser focused on the Latin American cannabis market and is a fully licensed producer of medical cannabis flower and oil products in Colombia. The company has a first-mover advantage in one of the most attractive cannabis markets (from a cultivation standpoint) and is led by a management team that has been very successful in this market.

Blueberries Medical is in the middle of a massive expansion in Colombia and has substantial growth prospects. The company is well positioned to capitalize on the Latin American cannabis market, and we will monitor how the management team is able to drive the story forward and create value for shareholders.

A few months ago, Blueberries Medical reported a major milestone and received approval for the production, sale and export of five CBD based health and wellness products from the Instituto Nacional de Vigilancia de Medicamentos y Alimentos (INVIMA), the Colombian National Food and Drug Surveillance Institute. Approval from INVIMA is significant and allows Blueberries Medical to commence product commercialization.

During the last year, we have seen strong demand for CBD health and wellness products in Latin America, especially in Colombia. Blueberries Medical plans to launch these products in Colombia and other emerging markets in Latin American in the near future. We are bullish on the growth prospects associated with the initial product launch and will monitor how the products gain traction on a going forward basis.

Although the last few months have been significant for the Latin America cannabis company, the shares have been under pressure with the rest of the market and this is a trend that we are watching. Blueberries Medical represents a multi-faceted growth opportunity that has significant catalysts for growth. The company is levered to one of the most attractive operating environments for cannabis producers and we are favorable on the focus on cannabis oil. We believe that the market does not fully appreciate the growth prospects associated with this opportunity and this is one to put on your radar.

Read entire article here.

e-mail icon Facebook icon Twitter icon LinkedIn icon Reddit icon
Rate this article: 
Article category: 
Regional Marijuana News: