most Tilray (WKN: A2JQSC) and canntrust Holdings (WKN: A2DWH4) Good and bad news. First of all, bad news: cannabis stocks in Canada have lost value in recent weeks. Now the good news: Currently, both stocks are still more than the beginning of the year.
Tilray was a bigger winner. But which of those two cannabis stocks is a better choice now? Let's compare Tilray and CannTrust directly.
What's talking to Tilray
Tilray's CEO Brendan Kennedy said recently that there are many companies worth $ 100 billion in the cannabis industry. And he thinks that Tilray will be one of them. If Tilray meets Kennedy's estimate, the stock is currently a good choice.
The Canadian cannabis market for recreation is already a start. Tilray is expected to have a plantation of 912,000 square meters at the end of this year, about three-quarters in Canada. The company also has enough space for future expansion. My colleague Sean Williams estimates that Tilray will rank fourth in cannabis producers by 2020 in terms of total production capacity. I think Sean's gonna be right.
Although capacity is the focus of interest, Tilray has another factor in the Canadian market: supply contracts with Canadian states and territories. The company is also in a good position. There are supply contracts with Tilray's eight Canadian states and territories.
It is also active in medicinal cannabis in the Canadian market. Tilray is also an important player there. The company signed an agreement with Sandoz Canada earlier this year. Novartisover. They will jointly develop and market hemp products.
Of course, Kennedy's vision remains a vision only if the company remains active only in Canada. This does not happen. The company is strongly represented in Germany and is now the only producer to be allowed to supply cannabis and cannabis oils. Tilray is also in a good position to take advantage of the growth of medical cannabis markets in other parts of the world, particularly in Australia, the United Kingdom and Latin America.
Talking about what CannTrust
CannTrust Holdings is much longer than Tilray, whose market value is $ 100 billion. But this company does not have to be a disadvantage.
In terms of market size, Cannutrust is smaller than Tilray, but very good in terms of production capacity. On June 26, 2018, the company opened the Niagara Perpetual Harvest Plant at 450,000 square meters. CannTrust will also have a fully-funded area of 600,000 square meters. After the project is completed, the company expects an annual production capacity of 100,000 kilograms.
CannTrust has also entered into supply contracts for the nine-state Canadian recreation hemp market. Recently, agreements with the eastern provinces such as Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador have been completed.
The company partnered with Kindred, a wholly owned subsidiary of the Breakthru Beverage Group, to commercialize cannabis products for the Canadian market. Breakthru Beverage Group is a leading wholesaler of alcoholic beverages in the United States. Canada is considered the largest distributor of alcoholic beverages.
CannTrust is the only cannabis manufacturer that has not yet entered the German market for medical marijuana, but is currently exporting to Denmark. The company also exported cannabis to Australia for medical use. CannTrust holds patents for Brewbudz, a portioned infusion that combines coffee with hemp and is marketed by Cannabiniers in the US.
Which stock is better?
In my opinion, this is not a difficult question. Maybe someday Tilray will turn into a $ 100 billion company – but I don't think it's worth anything yet, just $ 10 billion.
Unlike Tilray, CannTrust is already profitable. And with market value below $ 850 million, it is arguably one of the cheapest Canadian cannabis stocks. Tilray has clear production capacity and clear advantages in the German market, but I don't think these benefits are too big to justify a ten-fold higher rating than CannTrust.
Of course, CannTrust has risks in Canada, including a flood supplied in just a few years. For now, however, I see the stock as one of the better options in the cannabis industry.
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Motley Fool recommends CannTrust Holdings. Keith Speights doesn't have this stock.
This article was published on 28.10.2018 at Fool.com. Our German-speaking readers have been translated to participate in the discussion.