The United States and Canada may share a border, but there are very inherent differences in how each country views and treats marijuana. The U.S. has been plagued with many restrictions because marijuana is still considered a controlled substance at the federal level. As of November 2020, a total of 35 states as well as the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands allow pot for medical use. And many states are still grappling with the issue of recreational usage.
This is a stark contrast to what's happening up north. Canada legalized medical marijuana in 2001, leading to a greater evolution of the industry in the country. Consider how the laws have been changing in the Great White North. Canada's House of Commons passed the Cannabis Act (Bill C-45) in November 2017 to legalize the recreational use of marijuana. And in June 2018, it received the Royal Assent (formal approval of an act by a monarch).
While uncertainty prevails in the United States, investors could throw their hands into the pot (no pun intended) by investing in Canadian stocks that are either listed on major exchanges or traded in the over-the-counter (OTC) markets. Most of these stocks can be labeled as penny stocks.
Penny stocks may carry a significantly higher risk component.
Here's a look at some of those companies. All figures are accurate as of November 2020.
1. Canopy Growth
Market Cap: $11.357B
Canopy (CGC) is touted as Canada’s first unicorn in the pot market. While the company sells its product under various brand names, the brand "Tweed" has the most recognition, thanks to its affiliation with rapper Snoop Dogg. The company began trading on the New York Stock Exchange (NYSE) on May 24, 2018. Canopy stock is up about 17% year-to-date.
2. Aurora Cannabis
Market Cap: $1.725B
Aurora Cannabis (ACB) debuted on the Toronto Stock Exchange (TSX) in July 2017 and on the NYSE in October 2018. In addition to producing dry cannabis, Aurora received a license to sell cannabis oil in January 2017. It has been around longer in the OTC market—at one point returning 347% over a one-year period. In May 2018, Aurora Cannabis purchased MedReleaf (OTC: LEAF) for $2.5 billion. Aurora continued its acquisition strategy by buying organic cannabis producer Whistler Medical Marijuana Corporation in 2019. Aurora stock is down roughly 59.6% year-to-date.
Market Cap: $1.621B
This company calls itself one of the lowest-cost producers of marijuana. Aphria (APHA) produces dry cannabis as well as cannabis oil of varying qualities and strengths. The stock surged in December 2017 after the company announced it struck a deal to sell its products through the website of Shoppers Drug Mart—a major Canadian pharmacy chain. The stock is up 10% year-to-date.
4. The Cronos Group
Market Cap: $2.595B
Cronos Group (CRON) is in the business of investing in pot growers and companies in the marijuana business. This Canadian company produces its own cannabis products and also invests in other cannabis companies. The company's portfolio currently includes diverse brands such as PEACE NATURALS, a global health and wellness company, British Columbia-based cannabis producer COVE, and hemp-derived CBD producer Lord Jones. Thanks to the closure of a $1.8 billion investment from Altria early in 2019, Cronos is well-positioned to continue to expand its holdings going forward. Still, alongside other Canadian cannabis stocks, Cronos stock has seen some ups and downs in 2020, gaining only about 2% year-to-date.
5. The Hexo Corporation
Market Cap: $391.742M
HEXO (HEXO) is the first licensed medical marijuana producer headquartered in Quebec. This company focuses on recreational marijuana use. In October 2019, HEXO launched Original Stash, a value-conscious line of cannabis priced at just $4.49 per ounce, including taxes. HEXO stock has dropped by more than 45% year-to-date.
6. CannTrust Holdings
Market Cap: $28.24M
Appotex, one of Canada's premier pharmaceutical companies, has an exclusive global partnership with CannTrust Holdings (OTC: CNTTQ). CannTrust has a 430,000 square foot cultivation facility in the Niagara region, making it the sixth-largest marijuana facility in Canada. CannTrust offers a variety of dry and drop-based products for pharmaceutical applications.
The company's stock was delisted from both the NYSE and TSX in April 2020 as it was filing for creditor protection, according to Stock News. The stock now trades over-the-counter and is down more than 79% year-to-date.
7. Namaste Technologies Inc.
Market Cap: $58.456M
Namaste Technologies Inc. (OTC: NXTTF) focuses on the e-commerce side of the medical marijuana business. The company operates 32 sites in 20 different countries. In 2017, Namaste added CannMart into its portfolio, which has a distribution network in Toronto. This helps the site develop its retail distribution. The stock has declined by 38.7% year-to-date.
8. OrganiGram Holdings
Market Cap: $316.248M
OrganiGram Holdings (OGI) is a licensed producer of medical marijuana products. It began trading on the Nasdaq in May of 2019. This company's portfolio includes dry cannabis and cannabis oil, along with accessories like vaporizers that can be purchased on its website. OrganiGram's share price has declined by about 29% year-to-date.
9. Emerald Health Therapeutics
Market Cap: $39.445M
Emerald Health Therapeutics (OTC: EMHTF) is also a producer of dry cannabis and cannabis oils for medical use based out of British Columbia. New Cannabis Ventures reported that the company raised CAD $10 million in equity from Dundee Capital. Its stock value has dropped by close to 17% year-to-date.
10. The Supreme Cannabis Company
Market Cap: $51.19M
This company produces marijuana under the banner of its wholly-owned subsidiary 7Acres. In December 2017, SupremePharma changed its company name to The Supreme Cannabis Company (OTC: SPRWF). In October 2019, the company's wellness brand Blissco received a license to sell cannabis oil, which promised to increase the company's product offerings. Supreme Cannabis stock dropped by about 77% year-to-date.