Investing in marijuana stocks is typically a double-edged sword. These companies have garnered investor interest for their long-term potential, but continue to post sizable net losses…
Additionally, the sluggishness in the wider legalization process continues to hamper growth and access to finance. The index representing the industry The Alternative Harvest ETF (NYSEARCA:MJ) has shed 29% of its value this year.
However, no one can deny the potential in the industry. Cannabis continues to gain wider acceptance as nations realize its effectiveness from a medical standpoint. The global cannabis market is will grow at a massive 28.58% compound annual growth rate (CAGR) by 2025.
Though the pandemic has slowed down their progress, expect marijuana stocks to make a strong recovery in the coming months.
Hence, let’s look at some of the marijuana stocks that you should follow as we get closer to the post-pandemic world.
Marijuana Stocks: Canopy Growth (CGC)
Canopy Growth is involved in the production and distribution of recreational and medical cannabis. It is one of the largest pot growers in the world, with a market capitalization of almost $6 billion.
The market slowdown triggered by the novel coronavirus resulted in a 23% drop in CGC stock this year.
However, the immense potential of the CBD market makes it an interesting play for the future. Its financial performance in its most recent quarter was impressive and set it up for a solid end to the year.
Revenue grew 22% from the prior year. The majority of revenue was derived from outside the Canadian market.
Additionally, the company is getting closer to becoming free cash flow positive with a 50% improvement in the quarter. Total cash stands at roughly $2 billion, which provides it with an impetus to expand its market share.
Aurora Cannabis (ACB)
Aurora Cannabis is one of the largest cannabis companies in Canada. The repressed investor sentiment due to Covid-19 has led to a 73% drop in ACB stock’s price. However, the company is en route to achieve profitability in the third or fourth quarter of 2021.
Its latest results are encouraging, as revenues grew 15.9% from the prior year to CA$75.5 million.
The company benefited from cannabis stockpiling volumes rising 39% year-over-year.
Additionally, net loss reduced by…
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