Best of Breed in Cannabis: 5 Stocks Leading the Way in the Cultivation/Retail Sector

Joel Anderson  |

As a part of our special feature series The Future of Cannabis, we're highlighting some of the more promising companies operating in the cannabis industry. Part of that is digging into some of the strongest public companies currently out there, so we've taken a closer look at the operators in the cultivation and retail sector with an eye towards what might make for the strongest potential investment. Granted, some of these are micro-cap companies in the very early stages of their growth story and facing a relatively uncertain future in terms of their regulatory environment, so there is clearly a lot of risk associated with investing at this stage. That said, that risk is paired with huge opportunity, so taking a long hard look at some of these companies could very well pay off in the long run.

Here's a look at five companies that could be argued to be among the "best of breed" within the cultivation and retail sector of the cannabis industry. To read more about this sector, check out our feature article for week three of The Future of Cannabis, and visit The Future of Cannabis home page for links to all of the videos, articles, and interviews we're.

Canopy Growth Corp. (TSXV:CGC)

Market Cap: C$276.91 million

Canopy Growth Corp. is the result of a merger between Tweed Marijuana, Inc. and Bedrocan Cannabis Corp. in August 2015 to create the largest licensed cultivating and selling entity of cannabis in Canada. Canopy Growth Corp. currently operates Tweed, Tweed Farms, and Bedrocan Canada.

Tweed is committed to low-cost, high-yield production of quality cannabis for medical patients in Canada. Tweed Farms is a production arm of Tweed, and operates a 350,000 sq. ft. greenhouse in the Niagara region of Canada. All of its cannabis is sold via Tweed. Tweed Farms currently has plans to develop a 20-acre location for on-site harvesting and processing.

Bedrocan is a producer of medical cannabis with over 13 years of growing experience in global markets. Bedrocan produces its cannabis under stringent quality standards that are acceptable in seven countries and focuses on growing product from five strains with consistent cannabinoid contents.

Kaya Holdings, Inc. (OTCQB:KAYS)

Market Cap: $7.55 million

Kaya Holdings owns and operates various brands that produce, distribute, and sell cannabis products including raw flower, concentrates, and infused products. Kaya was labeled the first fully reporting U.S. public company to own and operate a vertically integrated seed-to-sale marijuana enterprise.

Kaya Holdings opened its first Kaya Shack medical dispensary in Portland, Oregon in July 2014, and its first cultivation operation was opened in the first quarter of 2015. Kaya currently operates two dispensaries for medical and retail sales in Oregon with a third location scheduled to open in late 2015.

Kaya acquired assets of OC Harley Gardens and established its Kaya Farms Grow operation in August 2015 in a 6,000 sq. ft. facility in central Portland.

Kaya intends to seek additional licensing opportunities in various states and territories throughout the United States which have legalized medical and/or recreational use. Kaya seeks to replicate its Kaya Shack design to support revenue-enhancing opportunities and enhance brand awareness.

Medbox, Inc. (OTCQB:MDBX)

Market Cap: $2.52 million

Medbox is a consulting services company in the cannabis industry that is shifting its operations to focus on the cultivation and retail of hemp and cannabis products.

In July 2015, Medbox acquired a 320-acre farm in Pueblo, Colorado for the cultivation of hemp. This property will also be used for the extraction and refinement of hemp oil for use in hemp oil infused products. Medbox plans to plant approximately 10,000 plants on this farm across an initial 10 acres in December 2015, leading to 35,000 plants on more acreage in 2016.

Medbox currently engages in the retail sale of cannsbis through one dispensary in Portland, Oregon. In April 2015, Medbox signed an agreement with an operator that will manage the dispensary and pay Medbox fixed payments under an agreement. Medbox will then make the license available for the operations of this facility in exchange for a lump sum and a share of operating profits over the course of the agreement.

Medbox was also granted a conditional use permit in San Diego, CA, effectively receiving a license for the operation of a medical marijuana dispensary. Medbox expects to open this facility in April 2016. Meanwhile, Medbox expects a delivery services tied to the conditional use permit will begin operations in December 2015.

Organigram Holdings, Inc. (TSXV:OGI) (OTCQB:OGRMF)

Market Cap: C$38.17 million

OrganiGram is a licensed producer and seller of cannabis under Health Canada’s Marihuana for Medical Purposes Regulations (MMPR). Under these regulations, OrganiGram is currently the only licensed producer and seller of cannabis in the New Brunswick province in Canada.

OrganiGram was founded in 2013 with the goal of providing reliable access to high quality cannabis to consumers in Canada. Since then, OrganiGram has expanded its product offerings and has become a well-established seller of organic cannabis.

OrganiGram recently reported the completion of a capital raise for over C$5.7 million in order to accelerate its facility expansions and to capture additional market share.

Terra Tech Corp. (OTCQX:TRTC)

Market Cap: $30.25 million

Terra Tech is an experienced producer of agricultural products that has established operations in the cannabis industry. Terra Tech operates in several markets through its subsidiaries.

Terra Tech engages in the design, manufacturing, and sale of hydroponic equipment for indoor agriculture through its subsidiary, GrowOp Technology Ltd. Terra Tech also is a wholesale seller of hydroponically grown produce through its subsidiary Edible Garden Corp.

In addition to the above operations, Terra Tech has two subsidiaries engaged in the cannabis markets. Terra Tech’s IVXX subsidiary produces and sells a line of cannabis flowers, cigarettes, and concentrates. IVXX’s branded products, which are produced in Terra Tech’s supercritical CO2 extraction lab in Oregon, are currently available in over 100 dispensaries in California. Terra Tech is also planning to operate medical marijuana cultivation, production, and dispensary facilities in Nevada through its MediFarm subsidiaries.

You can read more from our special program The Future of Cannabis here. To find out why and Viridian Capital Advisors launched this program, be sure to read What is The Future of Cannabis?? This program was made possible by the support of our sponsors.Click here for a full list of our sponsors.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:



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