Canopy Rivers may offer the best exposure to the cannabis sector, this investor says

With Canada’s recreational marijuana sector now up and running, it’s time for investors to weed through the crop of pot stocks and pick the likely winners. Not an easy proposition, you say? Then Canopy Rivers (Canopy Rivers Stock Quote, Chart TSXV:RIV) might be your best bet, says fund manager Bruce Campbell, who likes the cannabis investment platform’s breadth of exposure across the still-emerging industry.

“Canopy Rivers is the subsidiary of Canopy Growth and it’s where they’ve bought a bunch of incubating-type cannabis companies,” says Campbell, chairman and portfolio manager at Campbell, Lee & Ross, to BNN Bloomberg on Tuesday. “There’s an advantage to that. One, Canopy owns it and I think that they would vet it better than we could from the outside, and two, in one holding you get a bunch of different aspects of the industry. So I think that if you were going to buy one stock, it might be the way to go.”

“It’s hard on valuation because it’s a holding company,” he says. “I would hold it if I owned it. I don’t know if I would go out and put it in a portfolio unless you’ve got a speculative side for a few per cent of your portfolio.”

Canopy Rivers hosted an analyst and investor day on Tuesday, which featured board chairman and Canopy Growth CEO Bruce Linton, who recently stepped down from the RIV’s acting CEO position to make way for Narbé Alexandrian, former OMERS venture capitalist and Canopy Rivers’ President.

Linton said that he’s proud of what Canopy Rivers has accomplished to date in collecting together now 17 domestic and international cannabis investments.

“We have aspired to build the Canopy Rivers team using the same approach we use to build our portfolio -by identifying specialists with diversified but complementary skillsets and having them leverage their individual areas of expertise to create value for our portfolio partners and shareholders,” said Linton.

“After working directly with Narbé and seeing him excel in several internal roles since we recruited him from OMERS, the Board of Directors and I believe that he is the ideal candidate to lead the Company going forward to continue to build value for all Canopy Rivers shareholders,” he said.

Ahead of Canopy Rivers’ fourth quarter results due this week, the company last reported earnings on February 27, where its Q3 ended December 31, 2018, generated net income of $1.4 million and an Adjusted EBITDA loss of $1.4 million.