We may be in limbo with the Presidential election for some time, but marijuana stocks definitely won in 2020. Voters in several states approving the use of marijuana, this industry is likely to expand the Marijuana industry is a new one to look out for. This industry is still very risky and as result, I think most investors may want to continue staying away from it.
Despite the risk and crazy swings of some weed stocks, I often get asked by investors what I think of the marijuana industry.
Here are 4 things for the marijuana industry right now:
- Recreational Pot Market Grows: There are now fifteen states that have approved recreational marijuana use. The sales in Arizona alone is projected to be between $770 and $900 million. We are looking at billion-dollar markets.
- Medical Marijuana Market Grows: There are now thirty-five states that have passed some kind of medical purpose for marijuana. This clearly shows it is not limited to just a few states and there is a high chance of legalization by other states.
- No Federal Approval: Despite the rapid legalization of marijuana, it is not expected to be legalized on a Federal side because of a split government. Neither the Republicans nor Democrats would be likely come together to pass Federal legislation for legalization.
- Canada Rules Weed: For today, most of the most significant cannabis funds and stocks are found in Canada. This is mainly because Canada was the first great economic force to legalize recreational cannabis. Nevertheless, there are also quite a couple of U.S. Marijuana funds that are worthy of information. There are some high marijuana funds to purchase in 2019. Below are five that consider both USA and Canadian corporations.
That being said, now is a great time to buy weed stocks for those that can take on the risk. After cannabis was legalized altogether in Canada last October, investors can’t seem to make enough of the marijuana business. And while some marijuana stocks like Tilray (TLRY) or Canopy development Corporation (CGC) have been pretty rocky recently, the general industry appears pretty bullish on marijuana and its applications.
Made by Canadian medical marijuana activist Rick Simpson, RSO is the cannabis-derived oil that has a notably higher density of marijuana’s hallucinogenic substance, tetrahydrocannabinol (THC). THC has some reasonably powerful consequences that, when concentrated, have demonstrated signs of being able to present a variety of ailments.
Investors are asking, “What Marijuana Stocks Should I buy?” The short answer is we recommend investors looking at four specific companies: Tilray, Cresco Labs, Canopy Growth, and Aphira. The pair of Constellation and Canopy is arguably the most active participant in the cannabis industry. Constellation takes abundant financial resources and the track record of establishing successful consumer brands. Canopy has been the leader in the Canadian marijuana industry for some years, and its creation dwarfs that of almost all of its competitors.
Tilray Stock (NASDAQ: TLRY)
One of the most written about and traded stock is Tilray (NASDAQ: TLRY). It is one of the leading Canadian companies and one of the first cannabis companies to get the initial public offer. Tilray, which advertises itself as a multi-faceted medical marijuana company and looking to expand its services and products. It is priced around $10 a share after taking a massive hit for stagnant sales.
It had a high of over $148 in 2018. Will get back there not likely anytime soon, but it could certainly bounce back to $20. One of the reasons for the fall of Tilray stock in my opinion was the over the hype of the weed industry. Several “investment newsletters” promoted Tilray which caused a buying frenzy. Given the price now, I think it has stabalized enough to jump in to “buy on the dip” and sell quickly if you can stomach the risk.
Cresco Labs (OTC: CRLBF)
With Cresco Labs (OTC:CRLBF), you want to watch for two very specific things. The first thing you should look out for is the recent acquisition of Origin House(OTC:ORHOF). Last year on April Fools day, the merger was announced. Though it may have seemed that it was just an April Fools prank since nothing was announced for months afterwards. That changed when Origin House shareholders almost unanimously agreed to the most recent revisions of the merger on December 31st, 2019. The merger finished in its entirety on January 6th, which means the benefits of this acquisition should start showing them shortly.
The second thing to look for is how well the Illinois market treats Cresco Labs. They have just launched there in order to take advantage of the new adult-use recreational marijuana market that has been created. And on New Years Day, Cresco announced that it serviced nearly 3.500 customers at five different locations. Any new reports are likely to hit Cresco Labs hard at this precarious time, whether they be good or bad reports.
Canopy Growth (NYSE: CGC)
Unlike the other companies on this list, we won’t learn about Canopy Growth’s (NYSE: CGC) quarterly results until mid-February. They may give some information before then, but that’s not why you should look out for them. On January 14th, a new CEO is going to be taking control. David Klein was originally CFO of Canopy Growth’s bigger partner and largest shareholder, Constellation Brands. He then moved on to Canopy Growth’s board of directors for a year and a half, and he was the head of the board in October 2019.
In order to help promote Canopy Growth, Klein is likely to give several interviews this month. He’ll likely take Canopy Growth in a more streamlined financial path, as its previous path cost Constellation quite some money. This should give investors a likely idea of where Canopy Growth is headed.
Aphria (NYSE: APHA)
Aphria (NYSE: APHA) already looks to be a company to invest in. Their first quarter for 2020 was an incredible boon, and if they get similar results for their second-quarter update on January 14th, investors will be happy as a clam. Their best bet is CC Pharma, Aphria’s German medical cannabis distribution subsidiary. Profits from CC Pharma were over half of Aphria’s growth alone, and they were only acquired a year ago. Now that it’s fully integrated, CC Pharma is going to be Aphria’s cash cow.
But the Canadian market isn’t going to be a part of Aphria’s Q2 results, due to the company’s fiscal second-quarter ending before the cannabis products were even shipped. But using those numbers during its update next week might be eye-opening. After all, Aphria is going to be the first company on its list to provide an update for the Canadian market in 2020.