There’s no denying that marijuana stock investors were thrilled to see 2019 come to a close. After beginning with epic first-quarter gains, which saw more than a dozen pot stocks rise by at least 70%, cannabis stocks have since been stuck in a nine-month freefall.
What’s to blame? Look no further than…
supply issues in Canada that have kept product from reaching consumers, and high tax rates in select U.S. states (ahem, California), which have made it extremely difficult for legal cannabis to compete with black market producers. Throughout North America, illicit producers reigned in 2019.
But a new year brings new opportunities for the pot industry. The official launch of derivative marijuana products in Canada, and the expected legalization of weed in a handful of new U.S. states, should ignite top-line growth. Using revenue as the primary growth metric, the following seven marijuana stocks are expected to be the fastest growing in 2020.
1. Auxly Cannabis Group: Estimated sales growth of 1,109%
Among the dozens upon dozens of publicly traded pot stocks, Auxly Cannabis Group (OTC:CBWTF) takes the crown as the fastest-growing cannabis company. Of course, this comes with a bit of an asterisk given that Auxly has purposefully held back dried cannabis production with the intent to use it in derivative pot products, such as edibles. As some of you may know, the launch of derivatives was delayed by Health Canada until mid-December, meaning the bulk of Auxly’s revenue ramp-up has been pushed into 2020.
Furthermore, Auxly will see a number of its royalty partners make their first deliveries this year, and should see a key joint venture cultivation farm begin to pay dividends. Though profitability may still be more a year out, the company’s per-share loss is expected to shrink in 2020.
2. Flowr Corp: Up 731%
Revenue growth should also pick up notably for British Columbia-focused specialty grower Flowr (OTC:FLWPF), with sales advancing from a little less than $10 million in 2019 to roughly $80 million this year. This increase has a lot to do with Flowr’s Kelowna campus ramping up production, and Flowr also holding back some of its dried flower production to focus on high-margin derivatives.
What’ll be particularly interesting to watch with Flowr is that it’s predominantly growing premium and ultra-premium quality weed. Upper echelon-quality cannabis shouldn’t face the same pricing pressures as average and discount-quality marijuana, which I anticipate will lead to rapid sales and margin expansion…
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