Following years of promises from Prime Minister Justin Trudeau, and months of debate between Canada’s Senate and House of Commons, legal marijuana for adult purchase is set to hit dispensary shelves for sale in exactly three weeks. In legalizing recreational cannabis, our neighbor to the north is opening the door to an industry that could generate billions of dollars via domestic and export sales.
However, there are few, if any, guarantees that shareholders will benefit right out of the gate, despite lofty growth expectations for the cannabis industry. A quick screen of some of the most popular marijuana stocks yields five that have a very good chance of producing a full-year loss in fiscal year 2019 (most marijuana stocks are operating on a non-traditional fiscal calendar)…
Canopy Growth Corp.
Although Canopy Growth Corp. (NYSE:CGC) is possibly the most well-rounded of all Canadian marijuana growers, it’s still projected to lose money in fiscal year 2019 by Wall Street. The reason is because of its need to expand the company’s infrastructure in international markets, as well as build up its existing brands and marketing strategy. Canopy Growth also needs to finish the expansion of its 5.6 million square feet of growing space in British Columbia, which is costing a pretty penny.
The good news is that Canopy Growth has more than enough capital to complete its expansion in B.C. and internationally. On Aug. 15, Constellation Brands, the producer of the Modelo and Corona beer brands, announced that it’d be taking a $3.8 billion equity stake in Canopy Growth. With well over $4 billion in cash on its balance sheet, Canopy has more than enough capital to beef up its abroad presence.
GW Pharmaceuticals
U.K.-based GW Pharmaceuticals (NASDAQ:GWPH) made waves on June 25 when it became the first drugmaker in history to get a cannabis-derived medicine approved by the U.S. Food and Drug Administration (FDA). Considering that GW Pharmaceuticals’ lead drug…
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