If I Could Buy Only 1 PURE-PLAY Marijuana Stock, This Would Be It

What’s the best marijuana stock on the market right now? My pick would be Constellation Brands (NYSE:STZ). I think Constellation is the best marijuana stock because of its great growth prospects and relatively lower risk compared to most marijuana stocks.

But Constellation Brands isn’t a pure-play marijuana stock. Buying Constellation involves an investment in the company’s alcoholic-beverage business even more than in the cannabis industry.

So what is the best pure-play marijuana stock on the market right now? If I could only buy one pure-play marijuana stock, it would be…

Constellation’s partner, Canopy Growth (NYSE:CGC).

Why not a less expensive stock?

Yes, Canopy Growth’s market cap of more than $15 billion is way more than every other pure-play marijuana stock around. Why wouldn’t I choose a more attractively valued stock — perhaps Aphria (NYSE:APHA) or OrganiGram (NASDAQOTH:OGRMF)? First, let me say up front that it wouldn’t surprise me if Aphria and/or OrganiGram outperforms Canopy Growth this year.

Aphria’s share price has been beaten down primarily by the allegations from short-sellers that the company drastically overpaid for its LATAM Holdings acquisition. OrganiGram is a great underdog Canadian marijuana producer that doesn’t receive the attention it probably deserves in the U.S. investor community. I think it’s likely that both of these situations change in 2019, with a review by a special committee of Aphria’s board potentially clearing the air over the short-sellers’ allegations and OrganiGram potentially listing on a major U.S. stock exchange.

However, I take a long-term view when it comes to investing. If I could buy only one stock in any industry, it would be the stock of the company that I think has the best chance of being a dominant player in the industry. And for the cannabis industry, in my opinion that stock isn’t Aphria or OrganiGram — it’s Canopy Growth.

While Canopy looks a lot more expensive than most other Canadian marijuana stocks right now, my take is that it’s best to look at what the future for the cannabis industry could hold. I expect that the global marijuana market could easily exceed $100 billion within…

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