Are Canadian pot stocks the best bet for US investors?
Canadian pot stocks are the best way for U.S. investors to gain exposure to the global expansion of legal marijuana, a market that experts see growing by roughly 18% annually between 2020 and 2027.
What happened to Canada's biggest pot stocks in Q4?
Cronos reported the highest revenue growth of any major Canadian pot stock last quarter, as its top line soared 133% in the fourth quarter of 2020. Growth was driven by blockbuster expansion in non-U.S. markets, where sales nearly tripled, going from $4.6 million to $13.5 million year over year.
Is organigram the best Canadian Marijuana stock to buy?
One of the smallest of these Canadian marijuana stocks by market cap, OrganiGram is worth about $930 million. In part due to its small size, OGI stock tends to be one of the more volatile names on this list, and trades for less than $5 a share.
Should you invest in penny stocks in Canada?
While uncertainty prevails in the United States, investors could get a piece of the pot action by investing in Canadian stocks that are either listed on major exchanges or traded in the over-the-counter (OTC) markets. Most of these stocks can be labeled as penny stocks.
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How much does pot stock cost?
Top 100 Cannabis Stocks#CompanyPrice1GW Pharmaceuticals plcStock price $219.482The Scotts Miracle-Gro CompanyStock price $96.483Arena Pharmaceuticals Inc.Stock price $99.994Curaleaf Holdings Inc.Stock price $6.1541 more rows
Is CGC a good stock to buy?
CGC stock has a Composite Rating of 6 out of a best-possible 99, according to MarketSmith. Investor's Business Daily research shows the biggest stock winners typically have Composite Ratings in the 90s.
Are stocks traded for Marijuanas?
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), an exchange-traded fund, have significantly underperformed the broader market. MJ has provided a total return of -62.5% over the past 12 months, well below the benchmark Russell 1000 Index's total return of -5.2%.
Will Aurora stock go up?
Aurora Cannabis Inc (NASDAQ:ACB) The 10 analysts offering 12-month price forecasts for Aurora Cannabis Inc have a median target of 2.68, with a high estimate of 4.00 and a low estimate of 1.59. The median estimate represents a +73.48% increase from the last price of 1.55.
Is Tilray a good buy?
The 2021 merger between two strong cannabis companies, Tilray (TLRY 0.84%) and Aphria, is turning out to be fruitful. Since the deal was completed, Tilray has reported impressive quarterly results. Its recent third quarter (ended Feb. 28) report had some brights spots for investors.
What is the future of CGC stock?
Canopy Growth Corp (NASDAQ:CGC) The 15 analysts offering 12-month price forecasts for Canopy Growth Corp have a median target of 4.74, with a high estimate of 6.89 and a low estimate of 3.00. The median estimate represents a +9.73% increase from the last price of 4.32.
Is it smart to invest in medical Marijuanas?
Investing in the medical marijuana sector is relatively risky as long as cannabis remains federally illegal in the U.S. The plant's federal status also constrains the growth of the sector, and investors have no guarantee that the federal government will continue to allow states to treat cannabis as legal.
How do I buy OTC stocks?
The easiest way to buy OTC stocks is to set up an account with an online brokerage that supports trading of them. However, not all online brokerages offer them. Some brokerages that do include Fidelity, TD Ameritrade, Charles Schwab, and Interactive Brokerages.
Is Aurora innovation a good stock to buy?
Aurora Innovation (NASDAQ:AUR) Is In A Good Position To Deliver On Growth Plans. Just because a business does not make any money, does not mean that the stock will go down.
What is the target price for ACB?
Based on analysts offering 12 month price targets for ACB in the last 3 months. The average price target is $3 with a high estimate of $3.94770085 and a low estimate of $1.973850425.
Should I sell ACB stock?
Aurora Cannabis(ACB-T) Rating A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.
Can ACB recover?
Canada-based Aurora Cannabis (ACB 7.75%) and Cronos Group (CRON 5.42%) are two Canadian pot stocks that have very few chances to recover this year.
1. Canopy Growth Corp. (CGC:US New York)
Owns Ontario-based LP, Tweed. With its $4 billion investment made in August, Constellations Brands, whose stable of alcohol companies includes Corona and Mondavi, now owns 38% of Canopy.
2. Tilray Inc. (TLRY:US NASDAQ)
Owns the British Columbia-based LP. On Dec. 20, Belgium-based Anheiser-Busch InBev partnered with Tilray to spend $100 million researching CBD and THC non-alcoholic drinks. Each company will pitch in $50 million. A-B InBev owns Budweiser, Stella Artois, Labatt’s and literally hundreds of other beer brands. On Dec.
3. Aurora Cannabis Inc. (ACB:US New York)
Alberta-based LP also owns Ontario-based LP, MedRelief Corp. as well as subsidiaries CannaMed and Hempco Food and Fiber. On Sept. 17, it was reported that Coca-Cola had contacted Aurora about launching a CBD soft drink in Canada.
4. Cronos Group Inc. (CRON:US NASDAQ)
Owns Ontario-based LP, Peace Naturals Project Inc. On Dec. 7, Marlboro cigarette maker Altria Group purchased 45% of Toronto-based Cronos Group ( NASDAQ: CRON) for $1.8 billion
5. Aphria Inc. (APHA:US New York)
Owns the Ontario-based LP. During the first week in December, short seller Quintessential Capital criticized Aphria, causing a 50% stock drop.
6. Hexo Corp. (HYYDF:OTC US)
Owns Quebec-based LP, Hydropothecary. In August, Hexo signed an agreement with Molson Coors Canada to develop non-alcohol cannabis-based beverages.
12. Namaste Technologies Inc. (NXTTF:OTC US)
Owns Ontario-based LP, CannMart. On Sept. 17, Tilray severed ties with Namaste, who’d agreed to purchase cannabis from them, after it was revealed that Namaste held a shareholders’ party featuring scantily clad nurses in Montreal.
How much is Hexo worth?
HEXO is a small-cap Canadian cannabis stock, worth about $900 million. Not one to break with the wider M&A-heavy industry trend, HEXO agreed in February to acquire the smaller Zenabis Global for 235 million Canadian dollars in an all-stock transaction.
Is marijuana legal in Canada?
In Canada, recreational cannabis use was federally legalized in 2018, allowing a number of legitimate pot companies to spring up, many of which went public. Canadian pot stocks are the best way for U.S. investors to gain exposure to the global expansion of legal marijuana, a market that experts see growing by roughly 18% annually between 2020 ...
Is APHA a Canadian stock?
Along with Aurora, APHA is one of only two Canadian marijuana stocks highlighted here with profits over the last 12 months, and it trades for about 60 times trailing earnings. Aphria's revenue for its last reported six-month period rose 24% from the same period a year before, as the marijuana industry continues to boom.
Is Aurora Cannabis publicly traded?
The $2 billion Aurora Cannabis is one of Canada's earliest publicly traded weed stocks, and in recent quarters it has been putting up attractive growth numbers in its medical cannabis business. In its last fiscal quarter, which concluded at the end of December, medical cannabis revenue rose 42% year over year, as its international medical cannabis sales boosted growth, soaring 562%. Aurora's consumer cannabis division is also growing, rising 25% last quarter compared to the same period in the prior year. That division sells things like vapes, edibles and concentrates directly to consumers.
What is the biggest problem for Canadian pot stocks?
Financial access. The biggest problem across the board for Canadian pot stocks is access to traditional forms of financing. Pot proprietors at many Canadia pot companies fell for the mania of the late 2000s to early 2010s and overpaid for their assets. Because of this, even companies that perform well may have too much debt to repay or may not have the cash to expand.
When was hemp legalized in Canada?
1998 was the 1st major legal breakthrough for the modern Canadian pot industry. Industrial hemp production and cultivation was declared legal that year, expanding the industry far beyond the limitations of the limited license era that began in 1961.
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If you still find Canadian pot stocks fascinating, this might be the one for you
Sushree is a new member of the Fool family, keen on writing about the cannabis and healthcare sector and also has five years of experience writing on real estate, consumer sector, and macroeconomic topics. She holds a bachelor’s degree in business management, specializing in finance, and also a CFA Level 2 candidate.
The merger with Aphria proved beneficial
Before the merger, Aphria, under the leadership of CEO Irwin Simon, was already a strong profitable company. Tilray gave access to more markets. Though it could take a while for Tilray to fully reap the benefits of the merger, the company had already realized $70 million in cost synergies by Jan. 10.
Another impressive quarter
While popular names like Canopy Growth and Aurora Cannabis are struggling to grow revenue, Tilray impressed yet again with its fiscal second-quarter 2022 (ended Nov. 30) results. Its net revenue for the quarter increased 20% year over year to $155 million.
The only Canadian pot stock worth considering now
It would be a while for Canadian pot stocks to rebound. Unless they grow revenue at a drastic rate, it would be hard to achieve profitability any time this year. Moreover, most of them are focusing on expansion in the U.S. market, which could burden their balance sheet. Tilray, on the other hand, has been playing it smart.
What are the problems with marijuana in Canada?
One of the largest problems facing marijuana stocks in Canada is the lack of available dispensaries. The ratio should be about one dispensary to every 10,000 people, which is based on the model that Colorado used after it legalized the adult use of marijuana, Spatafora says.
How many dispensaries are there in Ontario?
While there are 14 million people who live in Ontario, the province has 40 dispensaries, but the model calls for 1,400, he says. "In 2019, Colorado reported $1.75 billion in medical and recreational revenue, and the state has the same population of Alberta, which has the largest number of dispensaries in Canada," he says.
How much cash does Cronos have?
Cronos has $1 billion cash that it can deploy. "Right now, they are not getting as hammered as 75% of the market based on their cash positions, and Cronos started pivoting last year to wholesale and building up other segments of their business," Spatafora says.
What is the 2.0 market?
The government recently rolled out its cannabis 2.0 market, a term used by Canadian officials to mark the inclusion of the sale of edibles and cannabis concentrates. While the sale of additional products could boost profit margins for cannabis companies, the lack of dispensaries could dampen sales.
Is the bear market over in cannabis?
The bear market in cannabis stocks is not over, Siegel says. "It's a really rough time for cannabis stocks, especially in Canada," he says. The upside is that while the larger licensed producers will struggle, other smaller companies can be a good deal.
Their stock prices could continue falling
David Jagielski is a designated accountant and has spent 10+ years working in finance for small and large businesses in many different sectors. He has been writing for The Fool since 2017. When he's not out hunting for cheap stocks or writing articles, odds are he's writing macros in Excel or reading history books.
1. The black market will keep dominating
There's a lot of growth still left in the Canadian market as a slow retail rollout and supply issues plagued the country's first year of legal pot. The problem is that the red tape in the industry is still making black-market products more attractive, and the gap in prices is getting wider.
2. Lower prices could do more harm than good
A lack of profitability is perhaps the biggest problem in the industry today; if the average price for legal pot were to come down in Canada, that wouldn't be good news for Canadian producers as that would shrink their margins. Aurora Cannabis ( NASDAQ:ACB) released its second-quarter results on Feb.
3. Stocks remain very expensive compared to their U.S. counterparts
Although marijuana stocks are falling heavily, the ones operating in Canada are still fairly expensive. Aurora, for instance, trades at more than seven times its sales over the past 12 months, while investors are paying more than eight times sales for HEXO. In contrast, Trulieve Cannabis is trading at a much more modest 5.4 times its sales.
What should investors do?
Given the headwinds that are still facing the industry in Canada, now may not be the best time to invest in Canadian pot stocks, even with their relatively low prices. While there's still risk involving U.S. pot stocks, they look like much more stable buys today.
