2 Cannabis Companies That Could Be the Next Industry Leaders

OrganiGram Holdings Inc (TSX:OGI)(NASDAQ:OGI) and Aphria Inc (TSX:APHA)(NYSE:APHA) are two companies that have a ton of potential and the opportunity to become the next market leaders.

| More on:
Marijuana plant and cannabis oil bottles isolated

Image source: Getty Images

Canopy Growth has been the market leader since it was the first publicly traded cannabis company in Canada. It has continued to lead, earning some of the highest returns for investors and leading the charge to expand internationally.

There are, however, two companies that have not been far behind throughout the process. Now, as Canopy is stalling, there is an opportunity for them to catch up and possibly take over the position of market leader.

These companies have managed their finances well, have built up low-cost operations, and have made large export deals with international countries.

For long-term investors, two stocks that will be your best bet through the next phase of legalization are OrganiGram Holdings (TSX:OGI)(NASDAQ:OGI) and Aphria (TSX:APHA)(NYSE:APHA).


OrganiGram is a Canadian cannabis producer headquartered in Moncton. It has been a top company from day one, even though it hasn’t gotten as much spotlight as some of its peers.

It’s one of only four companies to get sales agreements with all 10 provinces and is one of the only companies that has partnered up with celebrities, through its deal with the Trailer Park Boys.

It’s been increasing its production capacity, targeting a total capacity of 113,000 kg when it finishes Phase 4C of its expansion, which should be completed by the end of the year.

It has a unique three-level facility for cultivation that is located in Moncton. The three-level design has numerous advantages, but, most importantly, it maximizes OgraniGram’s footprint. It’s also using cutting-edge data to help drive decision making.

The company has many growth opportunities and has been focusing on the next phase of legalization using data based on U.S. information. This has led it to focus mainly on vape products and edibles, including beverages.

The company reported positive earnings before interest, taxes, depreciation, and amortization (EBITDA) in the third quarter. This was the fourth quarter in a row it had positive adjusted EBITDA. The adjusted EBITDA margin was an impressive 31%.

The company has a super low all-in cost of just $1.29 per gram, which allows it to be highly competitive. In addition, it has been managing its finances well and is financially sound. At the end of the third quarter, it had debt of less than $50 million against cash and short-term investments of nearly $90 million.

The company is trading for less than $1 billion, and the stock has tons of value below $6 a share.


Aphria is one of the largest licensed producers in Canada with a market cap over $2 billion.

It’s been busy the last few years, building its numerous brands, expanding its production facility phases, and signing tons of deals all around the world.

On the recreational front, Aphria has agreements with all 10 provinces, as well as the Yukon. This gives it access to 99.8% of Canadians. On the medical side, it’s one of the only companies that has made a deal with Shoppers Drug Mart as well as continuing to do its direct-to-patient sales through e-commerce.

Its operations are truly global with partnerships in 10 countries and on five continents. The cannabis landscape continues to change globally, and Aphria is taking full advantage.

Furthermore, it has a huge runway for growth with its plans in Germany for the medical market. Germany is one of the best medical markets to get into due to its large customer base and insurance-sponsored medical cannabis program. This makes it one of the top international markets that companies are going for.

In the three months ended May 31, the company did over $125 million in sales with an adjusted gross margin of about 22%.

The stock is trading around $8.50, offering investors a huge discount while it stays under $10.

Bottom line

Both companies have huge growth opportunities, are low-cost producers, have good capital management, and are trading at rock-bottom prices. If you are looking for the next stock to lead the industry, you can’t go wrong with Aphria or OrganiGram.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Daniel Da Costa has no position in any of the stocks mentioned.

More on Cannabis Stocks

Worker tags plants at an industrial cannabis operation
Cannabis Stocks

Can Canopy Growth Stock Finally Recover in 2024?

Down 98% from all-time highs, Canopy Growth remains a high-risk investment in 2024 given its weak fundamentals.

Read more »

A close up image of Canadian $20 Dollar bills
Tech Stocks

3 No-Brainer Stocks to Buy With $20 Right Now

These three stocks are easy buys for those who don't have all that much to spend, and want long-term growth…

Read more »

Pot stocks are a riskier investment
Cannabis Stocks

Slow Burn: Is Aurora Cannabis Finally a Good Buy in June?

One of the benefits of choosing from some of the most beaten-down market segments like cannabis is that even a…

Read more »

Caution, careful
Cannabis Stocks

I Wouldn’t Touch This TSX Stock With a 60-Foot Pole

I wouldn't touch Canopy Growth Corp (TSX:WEED) stock with a 60-foot pole.

Read more »

edit Cannabis leaves of a plant on a dark background
Cannabis Stocks

Why This Little-Known Cannabis Stock Could Double in 2024

This cannabis stock has already doubled this year since 52-week lows and could easily rise that much once more.

Read more »

Bad apple with good apples
Cannabis Stocks

1 TSX Stock I Wouldn’t Touch With a 420-Foot Pole

Down 87% from all-time highs, Cronos Group stock is a still a high-risk investment for long-term shareholders in 2024.

Read more »

A cannabis plant grows.
Cannabis Stocks

Canopy Growth: Buy, Sell, or Hold?

Canopy Growth (TSX:WEED) stock should make a killing on U.S. expansion, but investors will need to be very patient.

Read more »

Marijuana plant and cannabis oil bottles isolated
Energy Stocks

3 Canadian Value Stocks to Buy Right Now

Undervalued Canadian stocks such as Secure Energy should be part of your shopping list in May 2024.

Read more »