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Although Canadian cannabis stocks continue to execute and advance, the sector has been trending lower and this is a theme that cannabis investors are closely monitoring. The recent weakness has taken place on light volume and momentum has been trending lower during this time.

We are not surprised by the recent pullback and view it as a great opportunity for investors prior to the opening of Canada’s recreational marijuana market. Today, we have highlighted 3 Canadian cannabis stocks that are levered to this opportunity and that investors need to keep an eye on.

Organigram Trades Lower on Strong Earnings

Organigram Holdings (OGI.V) (OGRMF) traded slightly lower after the marijuana producer released second quarter financial results and we are monitoring how the shares trade from here. The market initially responded favorably to these results, but Organigram gave up its gains and this is a trend worth watching.

When compared to the same period last year, Organigram’s results showed impressive growth, and this is a trend we do not expect to end anytime soon. The Canadian marijuana producer is in the middle of a major expansion which will have a significant impact (improvement) on the company’s fundamentals.

We consider Organigram to be an undervalued opportunity and see upside to current levels. The company has a number of potential catalysts and we are favorable on the shares due to the continued execution, the fully funded growth initiatives and strong balance sheet, and the management team which is laser focused on growth.

Organigram has an attractive valuation and we believe that the recent pullback has created a great opportunity for investors. We are monitoring the recent weakness and recommend keeping an eye on how the shares continue to move.

Aphria: The Year of International Opportunities

2018 has been a major year for Aphria (APH.TO) (APHQF) and we are favorable on the recent developments as they have position the Canadian cannabis producer for significant and continued growth.

One of the company’s major focuses over the last few months has been the international opportunity and we are bullish on this focus. Yesterday, the Canadian marijuana producer announced a milestone after completing its first shipment of medical cannabis to its Australian-based partner, Althea Company.

This is a significant development for Aphria and it takes place only a few months after the Canadian marijuana producer invested $2.5 million in Althea in exchange for 25% of the Company. The investment represented Aphria’s second supply agreement in Australia and increases the company’s presence in the emerging cannabis market. Last year, Aphria completed its first shipment of cannabis oil to Medlab Clinical Limited, an Australian medical life science company.

Although Aphria continues to execute, the shares have been under considerable pressure and have fallen more than 20% in the last month (down approx. 50% so far this year). We are monitoring how the shares trade from here and are bullish on the recent developments as well as the long-term opportunity.

Aurora Cannabis: Executing on all Cylinders

Aurora Cannabis (ACB.TO) (ACBFF) has been making waves in the global marijuana industry and is an industry leader. The Canadian marijuana producer has one of the strongest balance sheets when compared to its peers and is levered to several emerging growth trends throughout the world.

From Australia to Germany, Italy to Denmark, this Canadian licensed producer has significantly increased its market share and is levered to new legal cannabis markets across the globe. On top of this, Aurora formed strategic partnerships with leading Canadian cannabis companies (Radient Technologies and Micron Waste Technologies).

Aurora has also made several strategic investments and acquisitions (CanniMed Therapeutics, Larssen, The Green Organic Dutchman, Pedanios GmbH, Hempco Food and Fiber, and Cann Group Limited), which has significantly advanced and improved the fundamental story. We are favorable on this aspect of the story and Aurora has a war chest of cash and is positioned to capitalize on these opportunities.

Aurora is highly levered to the recreational marijuana opportunity in Canada and has signed a supplier agreement to supply recreational cannabis for the Quebec market. The company is in the middle of several massive construction projects that are focused on increasing production capacity and we view the completion of these projects as a major potential catalyst for the shares. We are favorable on Aurora and cannabis investors need to keep an eye on this opportunity.