By now, you must have already noticed how every investment analyst or expert on the news is constantly talking about marijuana stocks. These stocks have recently become some of the hottest stocks to buy ever since recreational marijuana was approved in Canada last year.
A success story in the cannabis industry
Aphria stocks were first traded on TSX Venture Exchange (TSXV) on December 8, 2014. Many other marijuana companies like Canopy Growth also started its journey on the TSXV. At the time of the launch, Aphria stocks were trading at about $1.20, and then the company graduated to the Toronto Stock Exchange (TSX) in March 2017.
By then, stocks had already exceeded $6.20 and would only keep going higher. A further step up for the company would be achieved on November 2, 2018, when Aphria was also listed on the NYSE.
The company’s most recent earnings report for the fourth quarter of the fiscal year 2019 was so impressive that its stock price soared 40% to reach almost $10. In the report, Aphria had recorded a 74% growth in revenue from the previous quarter, and profits were $15.76 million.
Not only was this a remarkable growth in Aphria, but also for the entire cannabis industry. For the 2020 fiscal year, Aphria was expecting even higher revenues and profits, making it one of the most attractive marijuana stocks to invest in.
Newcomers to the industry?
Given the current state of the cannabis industry in Canada, it’s still in its infancy with plenty of potential. The potential also means that there is room for newcomers to enter the fray and make a mark.
One of these newcomers is Breath of Life Pharma (BOL), which has already submitted a preliminary prospectus to TSX with the possibility of an IPO soon. BOL is also targeting the European and Australian markets in a bid to become one of the top marijuana companies.
Breath of Life was founded in 2008 in Israel, which means it’s been in existence for much longer than, say, Aphria. The company is banking on this experience in the industry to become a formidable opponent against already existing marijuana companies in Canada.
The company’s origins date back to the 1960s, when research on cannabis was kickstarted by Professor Raphael Mechoulam. Although Israel still considers marijuana a dangerous drug, the administration did not curtail research into the medical benefits of the substance. It is because of this research that BOL remains focused on medical marijuana over recreational.
BOL CEO Tamir Gedo stated that the company is dedicated to producing pharmaceutical-grade marijuana, and the reason why BOL hires most of its staff from the pharmaceutical industry.
Through a 65,000 square feet accredited production plant, BOL can achieve the desired product consistently sourced from 377,000 square feet of cultivation facilities. Now the company plans an expansion into Portugal that would raise the total production of dried cannabis to 870,000 kilograms by the end of 2020.
Is this a promising investment?
Breath of Life Pharma is fully licensed to operate in Israel, the largest marijuana company, and also the only company fully integrated through the value chain. Its products are in line with GAP and GMP standards for production and distribution, so it’s highly likely that it will be launched on the TSX. The company produces medical marijuana in the form of capsules, tablets, creams, oils, and inhalers.
Should it IPO in Canada, it would immediately become one of the top marijuana producers in the country. For instance, Aphria recently increased its production capacity through acquisitions to bring anticipated production to 230,000 kilograms a year.
The production is much less than BOL already produces and would make the company a significant producer within Canada. Furthermore, the expansion into Portugal would further raise output.
It will be interesting to see BOL on the TSX, and this would make the company an excellent investment. Given the growth of already existing companies, Breath of Life has the potential to make your investment worthwhile.
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Fool contributor Adam Othman has no position in any of the stocks mentioned.