High Risk, High Reward: 3 Cannabis Stocks for the Bold Trader
The cannabis sector is one of the most challenging sectors in the market, leading to speculative cannabis stocks. If you’ve been following it for the last few years, you know the roller coaster ride investors have ridden. In addition to legislative challenges, issues on the macroeconomic side have pushed investors to be on the defensive, pushing companies down to their all-time low.
This increased investors’ fears and helped limit the access to potential capital for these companies to access from institutional investors and the banking system. While it is understandable that the cannabis sector has high risk, it would require a promise of superior returns to be considered at least.
Investing in cannabis is not something investors will load up on the road to financial success. That said, a long-term investor willing to bet on an industry experiencing market lows thanks to banking and federal constraints may also expect rewards that they may not get from other industries. That’s why it’s important to speculate on the right cannabis stocks.
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Let’s look at three cannabis stocks that we see potential right now.
Tilray Brands (TLRY)
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Tilray Brands, Inc. (NASDAQ:TLRY) is a cannabis-lifestyle, pharmaceutical, and consumer packaged goods company that operates in four key segments: Cannabis business, Distribution business, Wellness business, and Beverage alcohol business. TLRY grows, cultivates, and distributes medical and adult-use cannabis. The company also conducts its purchase and resale of pharmaceutical and wellness products. Not only that, Tilray has aggressively expanded its alcohol and beverage business and has ended up being one of the most diversified Cannabis producers.
Today, Tilray is one of the biggest names in the Canadian recreational sector, as it has consolidated most players in the market through acquisitions. Tilray resulted from a reverse merger with Aphria and taking the name. Other notable acquisitions were Hexo, SweetWater (Aphria’s strategic acquisition into the alcohol business), Truss Beverage (remaining 57.6% stake), and MedMen. Further, Tilray has recently acquired eight Anheuser-Busch beer and beverage brands to boost its alcohol and beverage business. This makes it one of those speculative cannabis stocks to buy.
Tilray management’s careful approach to expansion has allowed it to reach profitability faster than any of its Canadian peers and dominate its home market, making this a potential high-reward cannabis investment.
SNDL (SNDL)
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SNDL (NASDAQ:SNDL) is a Canada-based retailer specializing in the cannabis retail and operations, liquor, and investment segments. SNDL’s main retail banners include Liquor Depot, Value Buds, Ace Liquor, Wine and Beyond, and Spirit Leaf. It’s one of those speculative cannabis stocks.
SNDL’s cannabis retail and operations segment consists of the cultivation and distribution to the adult-use and medical markets in Canada and the sale of recreational cannabis in its stores and franchises. The company also deploys capital to investment opportunities that arise to help grow its business strategically.
SNDL’s acquisition of Valens is poised to help enhance the company’s offering by utilizing its low-cost manufacturing capabilities. Furthermore, this creates a vertical integration set to generate more significant revenue with an optimized manufacturing process that Valens brings to the table. SNDL plans to reconfigure its focus on higher-margin products and brands with the acquisition’s completion. This helps further increase the company’s profitability and is one of the choices for risky cannabis stock picks.
Bright Green Corp (BGXX)
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Bright Green Corporation (NASDAQ:BGXX) is a pharmaceutical company that provides cannabis, its related products, and other legal medicinal plant-based therapies. The company is heavily engaged in the propagation of recreation and medical use of cannabis. BGXX’s lineup includes a variety of products requested for authorized sales, including cannabis flowers, concentrates, capsules, tinctures, cannabis vape pens, and other cannabis-related products.
BGXX is one of the very few companies under federal and state laws allowed by the United States government to legally grow, manufacture, and sell cannabis and cannabis-related products for research and pharmaceutical applications alongside affiliated exports. Its approval from the DEA as a bulk manufacturer has placed the company on a pedestal, making it a high-potential investment for anyone willing to take a bit of risk. Last, Bright Green Corp’s stock has also been included in the Russell 3000 index, adding another milestone for 2023 – and making it one of our favorite speculative cannabis stocks.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.
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