10 Days Until Canada’s Recreational Marijuana Market Opens — These 3 Stocks Could Be the Biggest Winners


1. Canopy Growth

Canopy Growth already ranks as a top producer of medical cannabis in Canada. The company is poised to carry that success over to the country’s recreational market as well. How will Canopy do it?

First, Canopy has a huge production capacity. The company claims more than 3.2 million square feet of growing space, although that total includes some facilities outside of Canada. Second, Canopy has secured supply agreements with every province and territory that has announced supply plans. Capacity plus outlets for that capacity equals increased revenue for Canopy.

The company also has a great opportunity that won’t be available on Oct. 17. Canopy and partner Constellation Brands plan to launch a variety of cannabis-infused beverages. They’ll have to wait until 2019, though, because Canada won’t allow the sale of these products until regulations are finalized next year.

2. Aurora Cannabis

Aurora Cannabis has had a case of the munchies over the last couple of years. The company has gobbled up other marijuana growers like it’s going out of style, including the acquisition of one of Canada’s largest cannabis producers — MedReleaf.

All of this business-development activity has positioned Aurora to be a major player in the Canadian recreational marijuana market. The company expects to have an annual production capacity of 150,000 kilograms by the end of 2018. As it completes other expansion efforts, that capacity should jump to more than 500,000 kilograms per year. Like Canopy, Aurora also has supply agreements in place with provinces and territories across Canada.

Aurora could get another boost in October that doesn’t stem from the opening of the Canadian recreational marijuana market. The company plans to soon list its stock on a major U.S. stock exchange. This move will give Aurora more exposure to the U.S. investor community at a great time to gain visibility.

3. Aphria

Like Canopy and Aurora, Aphria is sitting pretty when it comes to production capacity. The company is on track to be able to produce 225,000 kilograms of cannabis per year by early 2019. Aphria should edge out Tilray to rank as the No. 3 marijuana grower in terms of capacity.

Finding buyers for its capacity shouldn’t be a problem. Aphria has supply agreements in place with all 10 Canadian provinces plus another agreement with the Yukon Territory. In addition, the company recently signed a deal with Emblem Cannabis to supply 175,000 kilograms of cannabis over a five-year period beginning in 2019.

Aphria, like Aurora Cannabis, has been listed as a top prospect as a cannabis partner for a major beverage maker. Coca-Cola was reportedly interested in Aphria before turning its attention to Aurora. Perhaps the most likely partner for Aphria, though, is Diageo. Lining up a major partner could enable Aphria to make a big splash in the cannabis-infused beverages market next year.