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Canadian cannabis stocks have been under pressure and investors are closely monitoring the recent pullback.

These stocks have been trading lower on lighter-than-normal volume and we are monitoring this trend as earnings season gets underway. When it comes to Canadian Licensed Producers (LPs), we expect to see these companies report strong earnings and are favorable on this trend.

Although earnings are expected to be strong, Canadian LPs have been trending lower and this is something to watch. Today, we have highlighted 3 Canadian LPs that investors should be monitoring closely.

Aphria Trades Lower After Reporting Earnings

Last week, leading Canadian LP Aphria (APH.TO) (APHQF) released third quarter financial results for the period that ended on February 28th and the shares have been trending lower following this release.

During the quarter, Aphria recorded $12.9 million in net income on $10.2 million in revenue. When compared to the same period last year, revenue and net income increased by more than 100%. The Canadian marijuana producer reported $8.5 million of gross profit (77.1% margin) and $2.9 million in adjusted EBITDA (10th consecutive quarter of positive adjusted EBITDA and a 238% increase from the prior year).

Aphria has been laser focused on increasing domestic production capacity and improving its international exposure. We are very favorable on these two business initiatives and continue to view Aphria as a long-term opportunity. During the last week, the shares have fallen more than 17% and momentum is trading near oversold levels.

We are monitoring the recent pullback and will keep an eye on how Aphria trades from here. Yesterday, the shares traded lower after announcing a significant development pertaining to its Broken Coast Cannabis subsidiary and investors should keep an eye on how Aphria continues to execute.

Organigram Reports Record Numbers for the Second Quarter

Earlier this morning, Organigram Holdings Inc. (OGI.V) (OGRMF) released second quarter financial results for the period that ended on February 28th. The Canadian marijuana producer reported strong growth and record numbers for the period.

During the quarter, Organigram recorded $1 million of net income on $3.2 million in revenue. This shows significant improvement when compared to the same period last year and we are favorable on this growth. The marijuana producer sold a record amount of dried cannabis as well as cannabis oil and this is a trend that we expect to continue over the coming quarters.

We are favorable on Organigram due to the company’s continued execution and current cash position. With more than $175 million worth of cash and short-term investments, the Canadian marijuana producer has significant resources to capitalize on the current strategy and we think this is a stock to watch.

Over the last week, Organigram has been trending higher and we are favorable on the recent rally. We are favorable on Organigram due to the continued execution, improving fundamentals, and valuation. The company represents a differentiated opportunity and will continue to closely monitor the shares.

Emblem: An Undervalued and Underappreciated Opportunity

When it comes to Canadian cannabis producers, we continue to prefer companies that are undervalued and are executing. One company that possess both of these traits is Emblem Corp. (EMC.V) (EMMBF) and we are favorable on the Canadian cannabis producer.

When compared to its peers, Emblem has a very low valuation and we believe the shares are significantly undervalued. With a market cap that is below $200 million and approx. $80 million in cash on the balance sheet, the marijuana producer is trading at a very low valuation and we see significant upside to current levels.

Emblem is laser focused on increasing production capacity and we are bullish on this growth initiative. The company has fully funded its expansion plan which will have a significant impact on the company’s fundamentals. Emblem has revamped its management team and we are favorable on the company’s director under the new CEO.

Over the coming months, we expect Emblem to make some major announcements and expect this to have a positive impact on the stock. The company is preparing to capitalize on the recreational marijuana opportunity and we think this is a stock that cannabis investors need to be focused on.