This Is the Top Cannabis Stock to Buy in September

If you think the stock market has been taken on a wild ride, have a conversation with a cannabis stock investor. Over the past three years, they’ve probably witnessed their pot stock holdings double or triple in value, and then lose 50% or more of their value…

There’s little question that marijuana is going to be one of the fastest-growing industries throughout North America in the 2020s. Unfortunately, all next-big-thing investments encounter growing pains, and that’s exactly what marijuana stocks have been dealing with since the end of March 2019.

However, this cannabis reckoning should prove to be a blessing in disguise for patient investors since it’s allowing them to pick up shares of pot stocks on the cheap. With the understanding that trying to time the market isn’t something that can be done with any success, my top cannabis stock to buy in September (and hold for years to come) is Canadian ancillary player Valens Company (OTC:VLNCF).

The biggest challenges awaiting Valens

As has become tradition for my monthly top marijuana stock selection, let’s first take a look at some of the hurdles that Valens will have to contend with in the months and years to come. Afterwards, I’ll cover all the reasons investors can be excited about this company’s long-term prospects.

Easily the biggest concern for Valens has to do with regulatory shortcomings in Canada. Since Valens is responsible for processing hemp and cannabis biomass for the distillates, resins, concentrates, and targeted cannabinoids that are used in the production of high-margin derivatives, and Canadian regulators delayed the launch of derivative products by two months until mid-December 2019, it’s somewhat tied the hands of processing companies. In other words, the buildup and launch of derivative products has been slower than anticipated.

What’s more, provincial regulators in select provinces have really dropped the ball. For example, Ontario utilized a lottery system to award cannabis dispensary licenses until Dec. 31, 2019. This method was highly ineffective, and it resulted in just 24 retail locations opening in the first full year of legal adult-use sales in Canada. The newly implemented method of reviewing and vetting applications has led to a steady increase in retail locations throughout Ontario, albeit the most-populous Canadian province is still playing catch-up. With an inadequate number of retail channels, it’s been difficult for licensed producers to reach consumers. This has backed up demand throughout the supply chain, which includes processing companies like Valens.

Valens can also expect a potentially crowded field of processors. It’s not going to simply waltz in and become the dominant third-party processor for the cannabis and hemp industry.

But even with these concerns, Valens and its currently depressed valuation (its shares are down roughly 45% since mid-February) make for an intriguing buy.

Here’s why Valens should be on your buy list in September

One of the top reasons to buy Valens is the plain-as-day pathway to success for derivative pot products in Canada. Although dried cannabis flower remains the most popular legal cannabis item purchased to our north, flower is easily commoditized and oversupplied. To avoid having their operating margins wrecked, licensed producers have no choice but to lean on higher-margin derivative products going forward. Even though the rollout of these products has been…

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