This is Why You Should Buy Cannabis Stocks Right Now
Are you an investor looking for an exciting new opportunity? Well, have you considered investing in cannabis stocks? In case you had not noticed, the overall stance about cannabis around the world has been changing lately. Last year, Canada became the only G7 country to legalize consumption, acquisition, possession and cultivation of cannabis. However, the road to legalization has not been entirely smooth, and most recently the push to legalize recreational cannabisin New Jersey failed. All the same, the dominoes have begun to fall, and now is the time to get in on cannabis stocks.
If you were to ask any seasoned investor, they would tell you to strike while the iron is still hot. Take the example of tech stocks at the turn of the century. Many financial experts thought that they were money losers, but look who’s laughing now? Consider buying a company’s stock like Netflix in 2009, a decade ago, when the stock was valued at just under $30. With just $300 to invest, you would have acquired about 10 shares. In 2015, Netflix stock underwent a 7:1 split, leaving you with 70 shares. Today, Netflix shares are valued at around $360, which means your $300 investment would have yielded almost $25,000.
By now you’re probably wondering, how are cannabis stocks similar to Netflix? The same thing happening to cannabis is the same as happened to tech stocks at the turn of the century. Many experts back then thought that tech stocks were just going through a bubble and were proven wrong. Anyone who got in on the industry early enough is now holding a fortune. This means that cannabis stocks could be very valuable in coming years, making today the best time to get in. At BuyStocksEasy, we keep track of the cannabis industry because it is clearly a promising venture. There are already many stocks in the space, but these are some of the picks to keep an eye on.
The 5 Best Cannabis Stocks To Buy in 2019
Cannabis companies have only started to become listed recently, but there are already a myriad options to choose from. Out of all the available options, only a few have real promise as an investment vehicle in the long-term. This is important because only the really solid companies outlast the bumps in the road, which are definitely going to come. This is why cannabis stocks are so similar to tech stocks over the past two decades – not all of them became Netflix. To avoid investing your money in a dud, these should be your top 5 picks to choose from.
It may seem unimaginative to consider what is perhaps the world’s largest cannabis producer, but that doesn’t make it any less profitable. After all, even well-known stocks like Amazon and Apple still have great results, right? At BuyStocksEasy, this company is of particular interest because of the amazing things they are doing. For Aurora, investors can feel secure about their investment over the long term because the company is already the top producer and will probably remain so. If cannabis stocks are like tech stocks back in 2000, then Aurora is similar to Apple or Microsoft.
Size definitely matters in this industry because it means that the company has the capacity to produce more than enough product and also the distribution channels. If you’re looking for a safe bet for your nest egg, then this is your best option.
Canopy Growth Corp
This is Canada’s largest cannabis company in terms of revenue and the world’s most highly traded cannabis stock. Add to that, the company is gearing to become one of the largest producers of cannabis by annual volume. Although it is primarily a Canadian company trading on the Toronto Stock Exchange under the ticker WEED, it is also available in the NYSE under the ticker CGC.
The company’s financials are excellent too. Annual revenue in 2018 amounted to CAD 77.95 million, recording a growth of 95.38% from 2017. EBITDA also increase by more than double to reach CAD 158.69 million in 2018. What’s more, Canopy is in high demand given its P/E ratio of 57. We can also tell that the company is in good financial health from its liquidity ratio. With a 5.24 current liquidity ratio, assets far outweigh liabilities and position Canopy excellently.
This stock becomes even more attractive when looking at the fundamentals, beginning with the investment of $4 billion by Constellation Brands. Now Canopy finds itself with more than $4 billion in hand, which they will probably direct into expanding the business. While the expansion into other markets may result in reduced profits in the coming year, it could result in higher profits in the coming years. That makes it more favourable for a long-term investment. Demand for their products isn’t lacklustre either as they have already secured commitments worth 70 tonnes to Canadian provinces.
Overall, Canopy Growth seems like a solid investment choice for years to come. If their plan to expand their operations goes as planned, they should raise their licensed capacity to 5.6 million square feet. Already 4.3 million of this area has been licensed by Health Canada, and upon reaching the target, the company could be the second-largest producer of cannabis.
Poised to become the third-largest producer of cannabis after Aurora and Canopy Growth, Aphria is definitely a pot stock to keep an eye on. The company hopes to achieve 255,000 kilos of cannabis every year after partnering with Doube Diamond Farms, which produces 120,000 kilos annually. This would complement their own Aphria One project that already produces 100,000 kilos and the rest from Broken Coast Cannabis. In fact, the Aphria One project was only recently approved by Health Canada, giving Aphria a significant boost from just 35,000 kilos before. This should provide the company with a huge increase in revenue, making it very attractive for investment.
All the added supply will need a demand, and the company has already secured supply deals with 10 provinces in Canada. To reach an even larger market, Aphria will partner with Southern Glazer’s to help with distribution. Demand will most certainly not be a problem because the company has ties not only in North America but also worldwide reaching countries like Germany, Australia, Italy, South America, etc. Even compared to its peers, Aphria seems like a suitable investment choice to the aggressive investor who likes to see double-digit growth rates.
When compared to the 3 previous giants, Tilray may not seem interesting first sight, but just hang in there, this might get interesting. First, they managed to partner with Sandoz, a subsidiary of Novartis, and Anheuser-Busch InBev. It is this partnership with the latter that is most interesting because it involves the possibility of making non-alcoholic cannabis-infused beverages. Second, Tilray are focusing on medical cannabis rather than recreational. This may seem odd at first, until you consider that people who seek medical cannabis are more willing to spend more. As research showed in Canada back in 2018 after cannabis was legalized, some users still bought theirs from unlicensed dealers. This way, Tilray can ensure that they are a sole provider of the product to their customers.
Green Growth Brands
While many other cannabis companies focus on the primary uses of cannabis, GGB has taken a different route into making cannabidiol-based health and beauty products. The company is already active in the US providing these products widely because medical use of cannabis is allowed in almost all states. GGB only recently became a public company after becoming part of Xanthic Biopharma, and they now control a very niche part of the cannabis industry. As the market continues to grow as fast as it has been predicted, companies like Green Growth will already have a foot in the door while the rest are still scrambling.
Top Cannabis Stock Market Predictions
There is no longer room to deny that the cannabis train is still at the station; it already left. BuyStocksEasy is really keen on this market, and expert predictions are very useful in this regard. According to Arcview Market Research, who partnered with BDS Analytics, the cannabis industry is expected to reach $57 billion in spending by 2027. Of this amount, 67% of it will be spent on recreational cannabis and the rest on medical cannabis. This is a huge growth from the current spending, which you can expect will grow as more states and countries legalize cannabis.
The tipping point, according to the Arcview report will be when federal laws making cannabisillegal are repealed. At the moment Pew Research shows that 62% of Americans want cannabisto be legalized. The current administration could be adamant to make the change (only 53% of republicans want it legalized) but perhaps it could happen after the 2020 US presidential elections.
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