Cannabis In Canada Market Overview October 2016

Canadian Market Overview

The Canadian cannabis sector continues to be blazing hot over the last year, especially in the last 2 months. The following chart shows the performance of the Canadian marijuana sector in general, the Marijuana Index Canada  contains a list of 10 publicly traded Canadian companies in the space, their stock prices, and market caps. Just looking at this chart, there has been a parabolic rise in share price since May of this year. Most parabolic rises like this are usually followed by a correction and then a basing period before any further advances can be made. The chart does show a clear breakout and passed overhead resistance, this means we are in a new bull market for cannabis stocks in Canada. We will provide an update on the American cannabis sector shortly.

(Click on image to enlarge)

Currently, licensed producers can only sell medical cannabis to registered patients of which there is about 82,000 of them. That may seem like a small number of patient for 35 licensed producers to sell to, however, the Canadian marijuana landscape is about to change in 2017. Canada’s government is in the process of allowing recreational marijuana across the country next year, so the number of customers these licensed producers can sell to should increase significantly by multiple folds in 2017 and 2018. The recent rise in share prices of the publically traded companies in Canada is a result of anticipation for the recreational market opening up and their sales to increase over the next few years.

The stock prices of these companies may continue to rise in the short term, however, any correction into the fall and in December should be bought as we are very bullish on the MJ sector for the remainder of this year and over the next 2 – 5 years, this is just the beginning of the next major advance that the sector and stocks will make.

Companies like Organigram  had a $143M market cap in Aug when it traded up to $1.85, their stock price recently reach all-time highs on October 10 with a share price of $2.53 giving it a market cap of about $201M. Canopy Growth Corp. (Tweed) with a market cap that reached $440M during August 2016 has seen their share price rise significantly over the last few months and is trading at all-time highs at $5.58 with a market cap over $645M. You can see real price charts like the ones below on many of the companies in the cannabis industry which are growers from the directory listing.

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Dan Jackson 4 years ago Member's comment

Hadn't realized the Canadian government was set to make such a significant change next year. Sounds like demand for #cannabis will skyrocket!

John Hartley 4 years ago Member's comment

Some interesting plays here, thanks.