The Canadian cannabis stocks we’ve uncovered today have accumulated large short positions following the early 2019 rally. Fueled by the signing of the U.S. Farm Bill into law in late December, the sector-wide rally includes cannabis export developments in Israel and Colombia and Florida’s repeal on the ban of smokable flower in its medical cannabis program.

This rally, however, has been accompanied by a spike in short interests.

For reference, shares held short represents the outstanding shares that have been sold short, whereas short interest ratio takes the shares held short and divides it by the 30-day average daily volume of shares traded.

The beginning of the year has been interesting for the marijuana industry, to say the least.

Pretty much no group of stocks has performed better than pot stocks, with a dozen well-known weed stocks advancing by at least 77% in the first quarter.

The expectation that global marijuana sales will grow by 38% in 2019, and more than double between 2018 and 2022, clearly has investors excited about the green rush.

It’s official: brick-and-mortar cannabis shops are legal in Ontario.

As of Monday, Ontario’s first marijuana shops are open for business–and so far, business is booming. According to early reports, eager cannabis buyers have been lining up for hours to get their first taste of store-bought cannabis.

Although the lineups weren’t as long as those seen in other provinces on legalization day last year, they were sizable: according to CTV News, 60 people were lined up outside London’s Central Cannabis store for its 9am grand opening.

The marijuana industry is budding before our eyes, but blink and you might miss a big development.

Arguably the most fluid aspect of the cannabis industry has been the constant updating and reshuffling of marijuana production. Growers have been in a pretty steady escalation battle with one another for more than a year now. Even though Canadian market demand may only reach 1 million kilograms a year, with more than 40 countries worldwide having given the green light to medical pot, the sky is seemingly the limit for long-term weed demand.

Cannabis retail has rapidly emerged as one of the most important components of the marijuana value chain. Not only do retail gatekeepers control one of the most intimate parts of the cannabis purchasing experience, but they do so at a premium — making cannabis retail a likely determinant of any marijuana company’s staying power.

In this article, we explore some of the leading cannabis retail brands in Canada.

Canopy Growth Corp. (WEED.TO 1.83%), the world’s biggest cannabis producer, wants to boost the market for medical marijuana in Europe. To lead the charge, it’s turned to an English countess who once drilled a hole in her head to get high.

At a country manor nicknamed “Brainblood Hall” where she’s experimented with hallucinogenic drugs, Amanda Feilding evokes the picture of eccentric English aristocracy. Yet the Countess of Wemyss and March is hardly a latter-day hippie waxing nostalgic for 1960s acid trips: She is a leading advocate for the use of psychedelic drugs in medicine, studies their effects on consciousness, and advises governments on policy.

CannTrust Holdings (NYSE:CTST) recently completed a greenhouse expansion that should boost its annual marijuana production to 50,000 kilos this year and another that's on track to increase its annualized production capacity to 100,000 kilos by the end of 2020.

Additionally, management disclosed Thursday it's signed a letter of intent to acquire 200 acres to grow cannabis outdoors as well. CannTrust thinks this acquisition can add at least 100,000 kilos of production next year, but that estimate could be too conservative. If so, CannTrust could be one of Canada's biggest marijuana growers in 2020. 

The marijuana industry has been quite heavily dominated by the companies that grow the substance over the course of the past several months. With so many investments going to the top of the industry, it begs the question as to why growers remain so highly coveted. One of the main reasons for this is that cannabis has become viewed upon as a commodity.

This means that even if a company has less than stellar financials, they could still have some value hiding in the large quantity of cannabis that they can produce. Often times, this can add a layer of comfort when looking to invest in a market that is quite volatile, to begin with.

Canadian cannabis stocks hit a high on October 15, 2018, after the late 2018 rally that was trigger by Constellation Brands’ (NYSE:STZ) $4B investment in Canopy Growth Corp (TSX:WEED).

Following the rally, cannabis stocks sold off and hit a bottom on December 21, 2018. We note that smaller cannabis names are generally more volatile due to their size and lack of liquidity.

However, when these names recover, they can experience even greater upside than some of their larger peers.

If you're looking to dip your feet into the cannabis investing swamp, you've probably considered the largest licensed producer in Canada, Canopy Growth (NYSE:CGC). American investors leery about owning businesses with a direct hand in activities the federal government still considers illegal make Scotts Miracle-Gro (NYSE:SMG) another popular option. Which company has the best chance of crossing the hurdles in front of it? Here's what you need to know about the path to market-beating gains in front of both these marijuana stocks.