These are challenging times for the Canadian economy, but the Canadian stock market is a bright spot. The INK Canadian Insider Index advanced 16.4 per cent in the first eight months of the year, outperforming broad U.S. benchmarks.
By following the insiders, we have identified four areas in the Canadian market that we believe offer investors distinct areas of opportunity, even as our domestic economy struggles: minerals, energy, dividend stocks and cannabis, or MEDiCs.
We touched on the minerals area on Aug. 1 and dividend stocks here on Aug. 20. Today we will focus on the cannabis opportunity, where diversification and name selectivity will be especially important given the risks that have plagued the industry since its domestic legal inception seven years ago this fall.
As a reminder, at INK we look at three key categories of factors in ranking a stock’s prospects: valuations, such as price-to-earnings (P/E) ratio; insider commitment, which considers insider holdings and public-market activity; and the stock’s relative price momentum.
Auxly Cannabis Group (XLY-T) is ranking high in all three areas. The stock is trading at a 12-month P/E of about 9.2, well below the Canadian market average of 17.8 as calculated by INK.
Meanwhile, CEO Hugo Alves has reported spending just over a quarter of a million dollars buying shares in the public market over the past six months. His most recent purchase was 440,000 shares at 17 cents on Aug. 19. Independent director Conrad Tate bought 485,000 shares at the same price on the same day. The insider buying has been taking place despite the stock rising 282.5 per cent in the first eight months of the year.
Auxly is focused on the Canadian market. In the second quarter, net revenues were $38.8-million, up 33 per cent year-over-year. Mr. Alves attributed the growth to “increased demand for our products, deeper distribution across the country, increasing production volumes and higher pricing.” We are always encouraged when a CEO reinforces their upbeat words with public market buying.
The stock price of Rubicon Organics (ROMJ-X) has also been rising in 2025, up 37.5 per cent as of the end of August. Most of the rally has taken place over the past six months. Rubicon is focused on organic certified, premium cannabis produced at its greenhouse in Delta, B.C.
Its business addresses the domestic market, but it is aiming to employ a test-and-learn strategy for small amounts of international demand in 2025.
On June 5, Rubicon acquired a 47,500-square-foot cultivation facility in Hope, B.C., from MediPharm Labs (LABS-T) for $4.5-million. Rubicon estimates the annual production capacity of the facility to be 4,500 kilograms, which would increase the company’s total production capacity by more than 40 per cent, bringing it to 15,500 kilograms annually. Full production is expected to come online in the first half of 2026.
The day after the acquisition announcement, director Karen Proud was a modest buyer, picking up 34,000 shares at 44 cents.
In the second quarter, Rubicon reported net revenue of $15-million, up from $12.1-million in the same quarter last year, a 24-per-cent increase. Net earnings came in at $773,242 (one cent per basic share), up from a loss of $454,165 (loss of one cent per basic share) in the comparable period. The stock is currently trading at a trailing P/E ratio of 0.8, below the average of its peers.
Modest amounts of insider public buying are preferable to not seeing any at all, especially if the stock is falling.
From the start of the year to the end of August, Canopy Growth (WEED-T) stock fell 37.3 per cent. However, we have not seen any senior officer or director public-market buying yet in 2025, despite the depressed share price. We will keep an eye on the former cannabis stock giant to see if insiders begin to pick up shares in the public market. Until they do, our interests will be focused elsewhere in the Canadian cannabis space.
Ted Dixon is the CEO of INK Research, which provides insider news and knowledge to investors.