The cannabis movement was virtually unstoppable last year. Canada legalized recreational marijuana. President Trump signed the Farm Bill into law, giving the green light to hemp and hemp-based cannabidiol (CBD) production. And a handful of U.S. states legalized weed in some capacity. It was a banner year for the marijuana industry — but not so much for marijuana stocks, which had an abysmal fourth quarter.
However, that’s changed in a big way to begin 2019. Through Feb. 7, the Horizons Marijuana Life Sciences ETF, which holds a basket of more than four dozen pot stocks, had risen by just shy of 50% on a year-to-date basis.
In other words, marijuana stocks are back, and in a big way…
Three pot stocks with reasonable valuations
Rapidly rising share prices, coupled with supply shortages and the ongoing capacity ramp-up throughout Canada, has led to nosebleed valuations throughout the industry. Although most pot stocks won’t be profitable on a forward earnings basis, others, such as Cronos Group, are lugging around forward P/E ratios north of 400.
But the industry isn’t a complete loss. Even following an incredible run over the past five-plus weeks, the following three marijuana stocks still sport valuations that make sense.
OrganiGram Holdings
As has been the case for a long time now, cannabis grower OrganiGram Holdings(NASDAQOTH:OGRMF) continues to offer one of the top value propositions on the basis of forward earnings. Even following an amazing run-up in recent weeks, OrganiGram is valued at a very reasonable 21 times next year’s earnings. Considering that sales are forecast to grow by 891% in fiscal 2019 and…
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