If you don’t believe that the CBD industry is growing by leaps and bounds, then all you have to do is simply visit any convenience store or health food store. You will literally find CBD products by the handful. If you want to capitalize on this industry, we don’t blame you. There is no question that investing in CBD stocks can be a very profitable move, but it HAS to be DONE CORRECTLY. Finding the best cannabis stocks isn’t the easiest thing to do. However, where there’s a will, there’s a way. Here are some cannabis stocks that many experts believe are posed for a break-out very soon:
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Canopy Growth (CGC)
According to the experts at Monday Morning, “…one of the best cannabis companies to invest in would be Canopy Growth Company.” This group is much less valuable now than it was eighteen months ago. Indeed, the stock in CGC has fallen as much as 70% from the highs of last year. Moreover, it currently sits at a four-month low after a recent 9% drop. Yes, there is a lot of pressure on the stock, partly because this company focuses heavily on the Canadian market, and that has definitely been a disappointment recently. Of course, what with any company (including cannabis companies), you have to deal with margins. The adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was at a loss of over $90 million.
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However, when you look forward, there are many significant signs of optimism. First of all, there was a massive investment by Constellation Brands which helped the company have $1.3 billion of cash on hand, and just about $400 million in debt. The company has now established some leading brands and is expanding beyond their Canadian home base. Thus, Canopy is well-positioned to manage a shrinking industry and their stock could be a good choice to invest in.
Cronos (CRON)
Is it time to add CRON stock to your list of marijuana stocks to buy? Not quite, but this company’s day is definitely coming. In some ways, the case for CRON is similar to Canopy. Cronos also received a large cash grant from an American company, tobacco giant Altria. Cronos is actually doing better than Canopy; they just recently closed their second quarter with $1.2 billion of cash on hand and zero in debt.
Of course, unlike Canopy, CRON doesn’t appear to have solid fundamentals yet. They have invested a great deal of money into research. Moreover, they are still working to create a brand, and they are focusing on products such as vapes and edibles. However, one good sign for CRON is that they have the cash to continue building their infrastructure and wait out any industry problems that they might encounter.
Aphria (APHA)
There are plenty of positives and negatives regarding investing in this firm. First of all, let’s take a look at some of the positives. In Aphria, we have a company that appears to be doing well based on their EBITDA report. Moreover, their revenue continues to grow, climbing over 120% in the quarter ending in May 2020. This company also has a significant interest in the European market.
Although there is much to like here, the APHA stock seems to be encountering a lot of difficulty. While APHA has outperformed many of their contemporaries, they have seen a decline of 15% from a year ago, with shares recently fading to a two-month low.
APHA currently has 500 million CAD in cash and 400 million CAD in borrowings. While that’s better than being in a negative trajectory, it’s still not necessarily the best situation to be in. However, APHA’s stock currently has a pullback below $5, so this could definitely be a sleeper pick as long as Aphria has good leadership going forward.
GrowGneration (GRWG)
Naturally, when it comes to Canadian cannabis companies, there has been a lot of struggles. This could definitely discourage a lot of people, but the good news is that there are plenty of cannabis companies outside of Canada that investors can get interested in. One such company would be Grow Generation (GRWG). This company distinguishes itself as a business venture that operates retail locations throughout the United States that serves both individual and commercial cannabis growers. There are several positives as a result.
First of all, this company hearkens to general gardening stocks, and those are currently doing well. Additionally, the company’s balance sheet is still in good shape. This could make a good “buy the dip” situation for investors. Of course, this company is not without its risks; it received a “bearish” report from Hindenburg Research. However, just the very fact that this company is in the United States might get it a few interested parties.
As long as you do your research, you are sure to find some solid cannabis companies to invest in!
About Carson Derrow
