Here are the best performing cannabis stocks of 2021

Canada legalized recreational cannabis in October 2018. In the preceding months, Canadian cannabis stocks soared in anticipation. Since then, however, they have fared significantly worse than the broader markets over the past two and a half years. In 2021, most Canadian stocks will continue to trade well below their record highs. These companies were impacted by lower than expected demand, negative profit margins, and overvalued acquisitions. Still, some Canadian cannabis stocks have seen some sort of comeback in recent months. Today I'm going to analyze two of these Canadian cannabis stocks: Tilray (TLRY - Get Rating) and OrganiGram (OGI - Get Rating). Tilray's stock is up 69% year-to-date and has a market cap of $ 6.4 billion. Tilray recently completed its merger with Aphria, making the combined company the largest Canadian cannabis company in terms of sales. For the fourth quarter of fiscal 2021, which ended in May, Tilray reported net sales of $ 142.2 million, compared to analysts' estimates of $ 199 million. While it posted an operating loss of $ 73.7 million, Tilray posted $ 121.5 million in non-operating income, ending the company with net income of $ 33.6 million, or $ 0.18, for the fourth quarter per share. For comparison, Wall Street expected a net loss of $ 0.12 per share. Tilray's adjusted EBITDA rose 285% year over year to $ 12.3 million, while free cash flow increased over 100% to $ 3.3 million. Tilray has confirmed that it has already achieved $ 35 million in cost synergies following the merger and is on track to save $ 80 million over the next 16 months. The company has a 16% share of the Canadian cannabis market and its subsidiary Manitoba Harvest supplies CBD wellness products to 17,000 stores in North America, making it a market leader with a diversified revenue base. OrganiGram also recently announced results for the third quarter of 2021, reporting net sales of $ 20.3 million for the period ended May. This represented a 39% sequential year-over-year increase over revenue of $ 14.6 million for the second quarter of the fiscal year. While the OGI share skyrocketed shortly after the quarterly results, it has lost over 12% in market value in the past three weeks. Despite the setback, OGI has achieved a return of 87% for investors over the year to date. However, investors should note that OrganiGram's profit margins are not exactly trustworthy. For the second quarter, the company reported a gross loss of $ 17.2 million. In the May quarter, gross profit improved to $ 2.1 million, but only due to fair value adjustments. OGI confirmed that it does not expect gross margins to improve in the fourth quarter, but claimed the management team has identified several cost-effectiveness opportunities that will be implemented in the future.