Canada’s healthcare sector is looking at the cannabis industry. For years (mainly heading into federal legalization in Canada and a couple of years after legalization took hold), this sector rocketed higher as investors largely viewed these companies as the growth stocks of the future. However, as many investors are well aware, this is a sector that’s since declined considerably, as hype and euphoria around the rise of cannabis as an investment class has waned.
With that said, there are other companies operating in the healthcare technology space that are worth considering as well. This is a sector that continues to grow and become more diverse, so it’s a space I think is worth diving into.
Here are two top Canadian healthcare stocks I think are worth taking a look at in 2025, given investors’ penchant for exposure to the healthcare sector right now.
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Canopy Growth
One of the leading Canadian cannabis producers, Canopy Growth (TSX:WEED) is among the top options investors often consider when they look at this space. The company is a major producer of both recreational and medicinal marijuana and saw its valuation surge into 2021 amid a booming hype cycle in a number of high-growth industries.
Unfortunately, as many investors can plainly see from the stock chart above, Canopy Growth is a shell of its former self. Having traded above $600 per share at its peak and now below $6 per share, this is a company that’s lost more than 99% of its value in roughly four years.
Now, there have been volatile jumps and dips along the way in recent years, and some investors may be looking for any sort of exposure to Canadian cannabis companies like Canopy amid potential regulatory changes in the U.S. and other markets around the world. The thesis is that because Canada’s cannabis sector is so advanced, the company could garner interest as a potential global player as regulatory blockages are removed in key markets like the U.S.
Personally, I’ve been bearish on Canopy in the past because this company’s previous valuation relative to the size of the Canadian market didn’t make sense. The market has caught on. However, there are some investors out there who may be looking at whether this sector and leaders like Canopy make sense at current prices. I’ll leave that up to the experts, but this is one part of the Canadian healthcare sector I think investors have to be very careful with right now.
WELL Health Technologies
In the healthcare technology space, WELL Health Technologies (TSX:WELL) is a top option for investors looking for outsized exposure to the Telehealth market. The company provides electronic medical record (EMR) solutions, a range of telehealth services, and a practice management software platform for providers. Thus, for those bullish on the pandemic-related trends of telemedicine continuing forward, this has become a hot stock for investors in recent years.
The company’s stock chart above highlights some volatility similar to that of Canopy. However, this is a company that has roared back as investors price in a much more rosy growth environment moving forward. Indeed, the company’s recent Q3 results highlighted the strong organic growth the company has seen, with revenue increasing 23% year over year.
Of course, there are risks to this space, but WELL Health has done a great job of building an international business with a competitive edge in certain markets within the fast-growing digital healthcare sector. With the U.S. and New Zealand markets key focal points for the company, it’s likely that investors will continue to see upside with this stock, so long as the company can push for greater profitability in addition to its revenue growth over time.
In my view, WELL Health is the preferable stock of the two picks due primarily to the higher-growth nature of the digital healthcare space. This is one Canadian healthcare stock I think will continue to garner more attention over time and probably should.
