Extraction specialists in Canada — the new kid on the block in the cannabis industry — were some of the best performing stocks in April. Demand for CBD oil is increasing as the deadline for legalization of infused foods and drinks approaches in October, but large cap companies like Canopy Growth still don’t have their own extraction facilities, or at least not enough capacityAnd they look likely to continue climbing through 2019.
So the major Canadian operators are turning to extraction specialists to do the job. Even after Aphria becomes the first of the large caps to have its own major extraction facility, it still won’t produce all types of distillates and terpenes, so these companies should continue to do well after October, more so if they round up business from smaller companies that produce cannabis.
Top Canadian Extraction Specialists
Three stocks lead the way: Valens Groworks (VGWCF), MediPharm Labs (MEDIF), and Neptune Wellness (NEPT). The first two already have contracts with outfits like Canop, Tilray, and Organigram, so their revenue is easy for analysts to project. Halo is the latest to hit the OTC market in the United States, and also the only one priced at less than a dollar. (I am long on the first two.) Valens is expected to do a capital raise soon to fund expansion, so their share price might drop in the near term, providing a reasonable entry point.
For more info, see what Alan Brochstein said about extraction specialists recently.
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