Finding the best marijuana stocks to buy isn’t an easy task. However, despite having generally under performed, many still have a lot of potential.
While differing regulations across jurisdictions and borders have hampered near-term growth, the global legal marijuana market is still forecast to reach…
$73.6 billion by 2027, according to market research by Grand View Research Inc.
That equates to a compound annual growth rate (CAGR) of 18% in each of the next seven years. The continued legalization of both medical and recreational marijuana in the U.S. and abroad is expected to propel the industry higher. This means there will still be promising marijuana stocks to buy as several should rise in coming years. While the road ahead might be volatile, there’s no doubting the potential growth that is waiting to be unlocked in marijuana stocks for long-term investors.
Here are seven marijuana stocks that investors shouldn’t overlook:
- Canopy Growth (NYSE:CGC)
- Tilray (NASDAQ:TLRY)
- Aurora Cannabis (NYSE:ACB)
- Aphria (NASDAQ:APHA)
- GrowGeneration (NASDAQ:GRWG)
- Cronos Group (NASDAQ:CRON)
- Hexo (NYSE:HEXO)
Let’s take a look at what makes each among the best marijuana stocks to buy now.
Marijuana Stocks to Buy: Canopy Growth (CGC)
We’ll start with the largest marijuana company by market capitalization, Canopy Growth. Being the biggest player in the recreational marijuana space has made Canopy Growth vulnerable to the industry’s growing pains over the past few years.
Earlier in 2020, the Canadian-based company reported a whopping 1.3 billion CAD loss for its fiscal fourth quarter, announced the layoff of 500 staff members and closed two of its largest greenhouses where it grows marijuana. The company also scrapped plans to open a new third greenhouse. Additionally, Canopy Growth has endured a lot of changeover among its executive ranks and board of directors. The Chief Executive Officer, Chief Operating Officer and Chief Commercial Officer have each changed in the past year.
All the turmoil has wreaked havoc with CGC stock, which is 41% below its 52-week high at $16.92 a share. Yet, there is reason to be optimistic about Canopy Growth’s future prospects.
The company’s most recent fiscal first quarter results were much improved, demand for recreational marijuana has risen since the novel coronavirus pandemic brought life as we know it to a halt, and Canopy Growth is cash rich, having 2 billion CAD in reserves. These facts mean that Canopy Growth is more resilient than many smaller marijuana companies and capable of withstanding the industry’s ups and downs. The company has also seen an upswing in its medical marijuana sales and recently launched a new U.S. focused e-commerce website called ShopCanopy.com that gave its shares a boost.
Investors can expect that Canopy Growth will find its footing and that its share price will appreciate in time. As such, it remains one of the key marijuana stocks to buy.
Like most marijuana companies, Tilray has seen its stock get beat up over the past year. In fact, TLRY stock has fallen 85% in the past 12 months and is now trading at just over $7 a share.
However, investors playing the long game should look at Tilray stock as a buying opportunity at current valuations. On Aug. 10, Tilray released its second-quarter results that were downright scary. From April 1 through to June 30, the company lost $81.7 million, a 125% increase from the $36.3 million loss reported in the same period of 2019. Sales across all business segments, including hemp products, rose by only 10% year-over-year in the second quarter to $50.4 million. The poor results sent investors fleeing and TLRY stock fell 13% the next day.
However, it’s not all bad for Tilray. Investors looking for a silver lining can take comfort from the fact that sales from the company’s international segment, while totaling only $8.3 million, were up 349% from the second quarter of 2019, and medical marijuana sales also jumped in the most recent quarter. Also, Tilray has a product line that is more diverse than many marijuana companies, focusing on recreational and medical products, as well as hemp.
It all bodes well for the company’s long-term prospects. Plus, much of the second quarter loss can be attributed to one-time, non-recurring charges and a one time inventory write down. TLRY stock may surprise on the upside in the coming months.
Aurora Cannabis (ACB)
Aurora Cannabis’ stock been a real yo-yo. The price of ACB stock had grown nearly 250% between 2015 and when Canada officially legalized marijuana use throughout the country in 2018. However, the share price then fell 91% from its record high of $128.27 on poor earnings and a lack of demand for legal marijuana products.
But after reporting better than expected quarterly results this spring, the price of ACB stock jumped 200% in one week to $17.40 a share. Sadly, the stock has fallen again in recent months and now trades just under $10 per share. So what to make of this extremely volatile stock and the company behind it?
Like many marijuana producers, Aurora Cannabis has…
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