Small cap stocks offer significant growth prospects but are very volatile, as market fluctuations have a significant impact on these companies. Thus, young investors who have a longer investment horizon and a greater risk-taking capacity could invest in these companies to obtain higher returns. So, if you have a higher risk-taking ability, here are three small cap Canadian stocks you can buy right now for high returns over the long term.

Gourmet markets

Goodfood Market (TSX: FOOD) is an online grocery company providing fresh meal solutions and groceries across Canada. The pandemic has resulted in permanent changes in consumer behavior, such as increased adoption of online shopping, which could benefit Goodfood Market. Given the accessibility and convenience of online shopping, I expect demand for the company’s services to continue, even in the post-pandemic world.

Meanwhile, Goodfood Market is expanding its product offering, increasing the speed of delivery and expanding its footprint to capture expanding markets. Its growing customer base and investments in automation bode well for its growth prospects. In the meantime, the company has collaborated with Microsoft develop artificial intelligence projects that could improve the overall planning and execution of its supply chain.

However, amid the massive sell-off in the tech space, the company is trading 49.5% below its January highs. So, given the company’s outlook for high growth, I think investors should use this correction to accumulate stocks and earn superior returns.

HEXO

In the midst of the expanding cannabis market, I chose Hexo (TSX: HEXO) (NYSE: HEXO) as second choice. Although the company’s third quarter performance was below expectations, its acquisitions are important growth drivers. Meanwhile, HEXO completed the acquisition of Zenabis Global earlier this month. This acquisition made HEXO one of the top three players in the Canadian recreational cannabis market. It provides immediate access to the European medical cannabis market while achieving savings of $ 20 million over the next year through synergies.

Meanwhile, HEXO is also working to finalize the acquisition of 48North and Redecan, making HEXO the leading licensed producer in the Canadian recreational market. Along with expanding its product portfolio, the acquisition could also improve HEXO’s profitability through Redecan’s lean manufacturing capabilities.

The company is expanding its operations into the lucrative US market with a production facility in Colorado. Thus, the company is well equipped to capture the expanding cannabis market.

Savaria

Savaria (TSX: SIS) is a $ 1.26 billion company engaged in the production and marketing of accessibility solutions. Supported by its strong performance in the first quarter and the accretive acquisition of Handicare, its share price rose 35.4% this year. However, its valuation still looks attractive, with its multiple futures price / sell and futures price / earnings standing at 1.8 and 24.7 respectively.

The demand for company services could increase in the context of an aging population and rising incomes. In addition, Handicare sells its products in 40 countries and generates 89% of its turnover in Europe. Thus, the acquisition could diversify Savaria’s sources of income and strengthen its distribution network outside of North America.

The acquisition also provides cross-selling opportunities while improving product innovation and production efficiency. The company’s growth prospects are thus expected to be healthy. Meanwhile, Savaria also rewards its shareholders with monthly dividends. Its forward dividend yield currently stands at a good level of 2.45%.

Teresa Kersten, an employee of LinkedIn, a subsidiary of Microsoft, is a member of the board of directors of The Motley Fool. The Motley Fool owns shares and recommends Microsoft. The Motley Fool recommends Goodfood Market Corp, HEXO Corp. and Savaria Corp. Fool contributor Rajiv Nanjapla has no position in the mentioned stocks.