Looking For Top Marijuana Stocks To Buy? Here Are 3 Names To Watch
Marijuana stocks have had an interesting year in the stock market so far. These stocks have shown resilience despite the volatility and economic uncertainty that was brought by the coronavirus pandemic. As daily cases continue to rise with the U.S. reaching over 100,000 new cases in the last few days, things do look bleak. How would top marijuana stocks fare as states are restricting movement and implementing new lockdown measures?
This could perhaps be one of the best years for marijuana stocks and investors who put their money in the cannabis industry. The industry in general has been showing signs of stability. Top cannabis stocks like Curaleaf Holdings (CURLF Stock Report) and Canopy Growth Corp (CGC Stock Report) have seen impressive revenue gains in their latest quarters. Part of this stability could be because Joe Biden has officially won the U.S. Presidential Race this year. One thing that is clear from the election results is that American voters of all parties overwhelmingly support legalizing cannabis. Cannabis initiatives have won legalization in states like Arizona and New Jersey earlier this month and they won by massive and historic margins. With this shift, it is clear that there is a growing demand for legal marijuana.
Current Senate Minority Leader Chuck Schumer has stated that marijuana legalization would be a major priority in a Democratic-controlled Senate. This is of course assuming that the Democrats manage to take full control of Congress in the next few months. Could 2021 be the year for marijuana stocks to reach all new highs? With all things considered, here are 3 marijuana stocks to watch.
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Best Marijuana Stocks To Buy [Or Sell]: Tilray
Tilray (TLRY Stock Report) is a global leader in cannabis research, cultivation, processing, and distribution. The company is the first GMP (Good Manufacturing Practice)-certified medical cannabis producer to supply cannabis flower and extract to patients and researchers in over 5 continents. Tilray produces and controls products according to quality standards by being GMP certified. The company’s share price is up by around 200% since the March lows at $7.66 as of 10:26 a.m. ET.
The company has just announced its third-quarter fiscal on November 9. Tilray reports a total revenue increase of 2% year-over-year at $51.4 million. Its cannabis segment revenue increased by 4% and the company also saw a 13% increase in Adult-Use sales. The company also reported a cash flow of $155.2 million at the end of its third quarter.
Despite the less than stellar performance in its third quarter, the company sees a $150 billion market for the global cannabis industry. This huge prize could be within the company’s reach as it positions itself for further growth. For instance, the company has boosted its presence in the U.S. by acquiring Manitoba Harvest in 2019. Manitoba Harvest is the world’s largest hemp food manufacturer. Tilray is also targeting the European market as more countries move to legalize marijuana. With that in mind, will you consider having TLRY stocks in your portfolio?
Best Marijuana Stocks To Buy [Or Sell]: Aurora Cannabis Inc.
Aurora Cannabis (ACB Stock Report) is a licensed cannabis producer that is based in Canada. The company is a pioneer in global cannabis that helps to improve the health, wellness, and lives of its users. Aurora boasts highly automated facilities across Canada and Europe that allow for optimized growing conditions. The company’s share price has seen an explosive gain of 22% on Tuesday morning as of 10.28 a.m. ET.
The company seems to be paving the way to a new era of medical cannabis products that has a global market. Its portfolio of medical brands includes CanniMed which helps manage symptoms of chronic disabilities and terminal illnesses. The company’s recent first-quarter fiscal posted in November however did not meet analyst expectations. Aurora posted a net revenue decrease of 1% this quarter at $51.88 million. Nevertheless, that is an impressive feat as the pandemic had affected consumer trends worldwide.
The decrease in revenue is because of a 16% decrease in consumer dried cannabis net revenue. The company also lost market share in key categories. To combat this loss, Aurora is currently executing a tactical plan intended to regain and grow its market share again. This includes leveraging on Aurora’s premium brands across all major consumer categories. Nevertheless, Aurora has assured investors this quarter that the company will achieve positive earnings by the second quarter. Could ACB stock be set for a rebound in the coming weeks?
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Best Marijuana Stocks To Buy [Or Sell]: Innovative Industrial Properties Inc.
Innovative Industrial Properties (IIPR Stock Report) is a cannabis-focused real estate investment trust. With the momentum of state legalization of medical-use cannabis in the U.S., the company focuses on partnering with well-capitalized and experienced medical-use cannabis operators. As a real estate investment trust (REIT), Innovative acquires and leases out properties to these marijuana companies. It then collects rental income as its main source of revenue.
The company is one of the few in the marijuana industry to have been spared from the market crash this year. Innovative’s share prices are up by 108% year-to-date and are currently traded at $156.9 as of 10:29 a.m. ET. So why has this company been thriving when the broader market has plummeted this year? In the company’s third-quarter fiscal posted in November, revenue grew by 197% year-over-year to $34.3 million. Innovative’s net income grew by an impressive 210% to $19.2 million as well. This is likely due to many marijuana companies facing economic stress and hence allowing Innovative to acquire their properties.
The company has stated that it acquired five properties totaling approximately 448,000 rentable square feet located in Florida, Michigan, and New Jersey. In this quarter, Innovative had also made available additional funding to tenants at seven existing properties. This is to facilitate continued buildout and expansion of facilities. This all plays well for Innovative as it looks like there is no stopping to medical marijuana growth. As more people grow to understand its benefits and recreational purposes, Innovative could be set for future growth. This is why IIPR stock is on this list of marijuana stocks to watch.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.