After we published an article about the benefits of recreational cannabis legalization, we discovered a large level of interest in vertical growth
New Mexico’s recreational marijuana revenues could reach between $1.8 billion and $2 billion, according to market research firm New Frontier Data.
In 2013, between 128 and 232 million people used cannabis (2.7% to 4.9% of the global population between the ages of 15 and 65). source: en.wikipedia.org
We’ve seen an increase in demand and wanted to include some information on some of the companies that are on Mexico’s marijuana market, so we decided to expand on our previous write-up. We are specifically examining price-takers from brokers’ customers.
Aurora Cannabis Inc. (TSX: ACB; Frankfurt: 21P) has reportedly completed a deal to acquire Uruguayan medical marijuana producer MedCann Group (TS: MLG) (WKN: A1C1CWM) Farmacies are relevant because it is the first, federally, to have gotten tetrahydrol into the market (THC).
Many broker-dealers have reduced their estimates on Aurora Cannabis in the last month. In addition to the stock’s normal trading range, price targets from various broker-dealers indicate the price might have climbed substantially above normal levels.
- CIBC raised its price target to $18.50 from $17 (CAD)
- Jefferies raised its price target to $9.44 from 4.59 (CAD)
- Canaccord Genuity raised its price target to $14 from $11 (CAD)
In our previous post, we looked at the future profits WEED.TO could see in Mexico’s legislation. I expect Constellation Brands to benefit because we have strong ties with the company (STZ).
Both brokers downgraded the company in February and claim the fall in price is connected to the drop in the stock price In May, Jeffries raised his target price target by $29.09 and cut his rating to reflect it.
For instance, the Colorado Industrial Hemp Program registers growers of industrial hemp and samples crops to verify that the dry-weight THC concentration does not exceed 0.3%.
We’ve seen good movement on the stock of the Canadian marijuana stocks, but we’re on the lookout for more. We think the business could see a big benefit in changes in Mexico, and are supportive of these markets.
Khiron Life Sciences
We haven’t gotten this far because someone had a stupid idea; We didn’t achieve this result because of an accident; We did not arrive here by accident; we have arrived due to the discovery of an original notion
At the beginning of this year, Khiron Life Sciences Corp revealed that it was offering the first globally licensed medical cannabis degree in Latin America in collaboration with Mexico’s TecSal. Khiron wants to put forward a strategy to roll out their clinic and business presence in Mexico with this pilot program.
Several innovations have been announced so far, but not the kind mentioned by Canopy Growth or Aurora Cannabis so far. By year-end 2020, ATB Capital is reducing the estimate for Khiron from $1.40 to $1.20 (CAD).
Hemp-derived CBD products (with less than 0.3 percent THC) are legal on the federal level, but are still illegal under some state laws . source: healthline.com
Prior to the most recent price target update, we had previously anticipated ATB to be in May of 2020. At the time, Canaccord lowered its price target to $2.80 (CAD) and has not yet modified the price target or removed the company from the investment list.
Compared to the average price target of Canopy Growth and Aurora Cannabis, Khiron is selling below cost. Although the Mexico is much smaller than Canopy Growth or Aurora Cannabis, we see an opportunity with a market cap of under $90 million (CAD).