Aphria has completed its Diamond facility which brought its total cultivation footprint to 2.4 million sq ft and 255,000 kg per year. However, we think the new management team has done a good job of executing nicely while preserving balance sheet strength.

Aphria used to be one of the highly-regarded medical cannabis operators but its credibility took a beating after the Nuuvera and LATAM scandals.

To a certain degree, Canopy is also only one of the few available options to gain exposure to the global cannabis industry. We think Canopy remains a viable option for investors to bet on the Canadian cannabis sector. We think Canopy's large cash balance, backing from Constellation, leading footprint in Canada, pending acquisition of Acreage ( OTCQX:ACRGF), and international scale remain ahead of other peers. The insertion of Constellation's former CFO as the new CEO is a statement by the U.S.

Canopy: Despite a disappointing 2019, we think Canopy will return to its focus on market share, cost control, and disciplined growth.

Meanwhile, we think Aurora Cannabis is the weakest player given its stretched balance sheet and large corporate overhead.

We believe Aphria and Canopy are the best large-cap stocks within the Canadian large-cap space, due to their balance sheet strength and large installed capacities.

As we analyzed in a recent weekly cannabis report, many Canadian companies were destroyed by corporate scandals and toxic financings. However, extraction represents a unique and growing segment within the Canadian market.ДЇallen Angels: CannTrust ( CTST), Green Organic Dutchman ( otcqx:TGODF), Emerald Health ( otcqx:EMHTF) are some of the stocks that fell the most in 2019. listings and they tend to be viewed as more domestic-focused with less pronounced international expansion plans. They also have access to adequate capital but these financings could be more expensive.

However, they tend to be more regional-focused such as HEXO in Quebec and OrganiGram in the Maritimes. These companies also have sizable production capacities and meaningful market share in their respective categories. Small-Cap: HEXO ( HEXO), MediPharm ( otcqx:MEDIF), OrganiGram ( OGI), Village Farms ( VFF), and Valens GroWorks ( otcqb:VLNCF) are what we consider to be the small-cap names. It is also worth mentioning that all of these stocks are listed directly on a U.S. However, what differentiates these companies from the rest is their global infrastructure and adjacent opportunities in beverage, pharma, and other applications of cannabis. Given the mainstream estimate of 600 tonnes for the domestic demand in Canada, Canopy alone could almost supply the entire country based on its estimated total designed capacity. These five companies have access to the largest amount of capital and are building capacities that alone could supply the entire domestic market in Canada. Large-Cap: Canopy ( CGC), Aurora ( ACB), Cronos ( CRON), Tilray ( TLRY), and Aphria ( APHA) are what we believe to be the large-cap LPs in Canada. That's why we think the top 10 names are most likely the survivors in the long-run. The domestic sector simply cannot support that many companies. Canada has a population of fewer than 40 million people and the demand for cannabis is estimated to be 600 tonnes annually, with the majority of them still via illegal supply channels. The Canadian cannabis market is smaller and could only support a handful of players in the long-run. Micro-cap companies with a market capitalization of less than $300 million are highly risky and not suitable for average investors. While there have been more active cannabis companies in 20, many of them ceased to be relevant during 2019 leaving only 10 companies that are worth taking a look. More failures will likely be needed before the situation improves materially. After a disappointing 2019, we think the Canadian market will remain challenged in 2020. Since Canada legalized recreational cannabis in October 2018, the world has been watching its progress.

Cannabis micro cap stocks