|Bid||8.47 x 800|
|Ask||8.56 x 39400|
|Day's Range||8.00 - 8.70|
|52 Week Range||6.04 - 25.10|
|Beta (5Y Monthly)||3.77|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
You hear that? That's the sound of the beginning of a big rebound in marijuana stocks. Year-to-date, the ETFMG Alternative Harvest ETF (NYSEARCA:MJ) is already up almost 10% -- and we are less than three weeks into the year. That's a huge gain in a short amount of time.The big rebound in pot stocks can be attributed to favorable fundamental developments (multiple cannabis companies have reported strong fourth quarter numbers in early January), favorable legal developments (among other things, Illinois just legalized recreational marijuana), and a whole bunch of investors deciding that with the new year, comes new opportunity.That's the good news for cannabis bulls. The better news? This big rebound in marijuana stocks is just getting started.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOver the next several quarters, everything is going to improve for the cannabis sector. Demand trends will re-accelerate thanks to new vapes and edibles products, as well as retail footprint expansion. Supply overhang issues will ease with rebounding demand. International markets will start to take off as governments around the world follow in Canada's footsteps. Revenue growth trends will improve. Margins will bounce back. Losses will narrow.All in all, things will just get better for the cannabis sector in 2020, and as they do, depressed and beaten-up pot stocks will rebound. * The Top 5 Dow Jones Stocks to Buy for 2020 With that in mind, let's take a deeper look at four marijuana stocks to buy for the big 2020 rebound. Canopy Growth (CGC)Source: Shutterstock The cannabis market's biggest and most important company, Canopy Growth (NYSE:CGC), has been leading the pot stock rebound in 2020 so far. Year-to-date, CGC stock is up more than 15%.Canopy will continue to be a leader in this rebound for the rest of 2020 for one very simple reason: this is the best cannabis company out there by a mile.They have the biggest balance sheet -- thanks to a multi-billion dollar investment from Constellation Brands (NYSE:STZ) -- with the most resources and firepower to invest in things like product development, international expansion, strategic acquisitions, and production build-out. They also have the biggest sales base, the most production capacity, and the widest global distribution network.The management team is arguably the best in the business, as Constellation has infused the company with experienced talent. They also have the most visible pathway to dominating the ultra-valuable U.S. market, thanks to a planned acquisition of U.S. cannabis company Acreage.All in all, Canopy Growth has significantly differentiated itself from the pack in the cannabis world. As the leader, if pot stocks keep rebounding throughout the rest of the year, CGC stock will lead that rebound. Cronos (CRON)Source: Shutterstock The only other "high quality" cannabis company that has won the multi-billion dollar support of a consumer staples giant is Cronos (NASDAQ:CRON). This unique feature should propel meaningful out-performance in CRON stock in 2020.Cannabis market trends will rebound in 2020 thanks to new products, retail footprint expansion, favorable legislative progress, and international growth, among other things. As those trends rebound, investors will rush back into the marijuana industry like its early 2019 all over again.When investors flocked into the space back then, they did most of that flocking into two names -- Canopy and Cronos -- because those were the smartest and safest investments given their fortified balance sheets, huge investment capability, and tremendous financial support. Of note, Cronos stock outperformed Canopy stock in the first three months of 2019 by a tally of 80% to 60%, mostly thanks to the fact that CRON stock was cheaper than CGC stock (15-times one-year forward sales for CRON, versus 30-times for CGC at the beginning of 2019). * 10 Cheap Stocks to Buy Under $10 In 2020, the same dynamic will repeat. Investors will rush back into the space amid improving fundamentals and trends. They will specifically rush back into the smartest and safest investments in the space, CRON and CGC. And CRON will be the bigger winner, because CRON stock (9-times one-year forward sales) remains way cheaper than CGC stock (14-times one-year forward sales). Aphria (APHA)Although most pot stocks are up big in early 2020, shares of cannabis producer Aphria (NYSE:APHA) are not, mostly because the company reported second quarter numbers in January that missed across the board. Revenues missed estimates, as did profits. And management dramatically cut its full-year guide.Consequently, APHA stock is actually down 1% in 2020, while many of its marijuana peers are up 10% or more.This weakness won't last. It's a gross overreaction to a few headline second quarter misses. Underneath those misses, the numbers were actually pretty good. Revenue growth accelerated sequentially, from up 8% quarter-over-quarter in Q1 to up 9% quarter-over-quarter in Q2. Volume growth also accelerated, and by way more, going from 7% growth in Q2, to 18% growth in Q2. Gross margins reversed course, after dropping from 53% in Q4 to 50% in Q1, and shot back up to 57% in Q2. At the same, Aphria reported a huge sequential increase in adjusted EBITDA after a sequential drop in Q1.In other words, all of the company's important underlying trends improved meaningfully in the second quarter. Revenue, volume, margin, and profit trends all got better.And that's before the launch of new vapes and edibles products. As such, the numbers will only get better in the third and fourth quarters. As they keep improving, investors will push APHA stock way higher, especially considering its relatively depressed valuation base (2-times one-year forward sales). Aurora (ACB)Source: Shutterstock Last, but not least, on this list of marijuana stocks to buy for the big rebound in 2020 is Aurora (NYSE:ACB).Aurora has long been the second-biggest player in the Canadian cannabis market, coming in right behind Canopy in terms of sales, volume, and production capacity. But investors have increasingly expressed concerns over the company's balance sheet and liquidity, as Aurora features one of the worst balance sheets in the cannabis sector and has a major cash burn problem.Ultimately, these concerns have kept ACB stock depressed. These concerns could ease dramatically in 2020. Aurora will launch of suite of edibles and vapes products over the coming months. They should also be opening a ton of new stores.This combination will reignite demand trends at Aurora, and revenue growth rates should start improving. As they do, more favorable supply-demand dynamics will push up margins. Bigger revenues plus bigger margins equals smaller losses. Smaller losses mean less cash burn.As cash burn becomes less of a problem in 2020 (and as the company's improved revenue growth trajectory illuminates a more visible pathway towards profitability), investors will become less concerned about the company's balance sheet and liquidity. The more those concerns fade, the more ACB stock will rally.As of this writing, Luke Lango was long CGC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 5 Dow Jones Stocks to Buy for 2020 * 7 Fintech ETFs to Buy Now for Fabulous Financial Exposure * 3 Tech Stocks to Play Ahead of Earnings The post 4 Marijuana Stocks to Buy for the Big 2020 Rebound appeared first on InvestorPlace.
Following a disastrous performance in 2019, marijuana stocks are staging a huge comeback in early 2020. So far this year, the ETFMG Alternative Harvest ETF (NYSEARCA:MJ) is already up about 10%, representing an impressive average gain per trading day of nearly 1%.Leading the charge are the usual suspects. So far this month, Canopy Growth (NYSE:CGC) is up 15%. Tilray (NASDAQ:TLRY) has gained 19%. and Cronos (NASDAQ:CRON) has added 6%.But one marijuana stock missing out on this party is Aphria (NYSE:APHA). Best known as the only cannabis company to report a quarterly profit so far, APHA has not rebounded with its peers in 2020. Instead, Aphria stock is flat in 2020.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis relative underperformance of APHA stock won't last.Aphria's trends are too favorable, its fundamentals too good, and its valuation too discounted to keep Aphria stock depressed for much longer. As marijuana stocks continue to rebound throughout 2020 amid favorable cannabis trends, Aphria stock will turn into the one of the segment's hottest stocks. Indeed, my estimates indicate that Aphria stock could more than double this year.Here's how that could happen. Marijuana Stocks Will Keep ReboundingCentral to the bull thesis on APHA stock is the idea that the entire cannabis sector will rebound dramatically in 2020.Three positive catalysts will drive that rebound. First, the currently depressed demand trends of Canada's legal cannabis market will improve significantly in 2020. The factors that will bring about its improvement are the introduction of new edibles and vape products, more aggressive launches of new stores, and logistical improvements by legal suppliers and distributors. The demand rebound will turn falling revenue growth rates across the whole industry into rising revenue growth rates. * The Top 5 Dow Jones Stocks to Buy for 2020 Second, the supply glut of Canada's legal market will ease due to accelerating demand trends. Economics 101 teaches that falling supply and rising demand lead to higher prices. Higher prices create higher margins. Consequently, the cannabis industry's margin weakness of 2019 could turn into margin strength in 2020.Third, various cannabis markets outside of Canada will gain traction and turn into meaningful revenue contributors for legal suppliers. That is, governments around the world will adopt more lenient marijuana laws, thanks to increasing pressure by consumers for such laws. As that happens, more countries will legalize cannabis in 2020. At the same time, more and more states across the U.S. will legalize marijuana, and more and more Canadian cannabis companies will jump into the U.S. market.The marijuana industry seems optimally positioned for a huge rebound in 2020, meaning that the recent strength of the sector's stocks will most likely persist. Aphria Stock Will Join The RallyAphria stock is currently sitting out the big rally by cannabis stocks. That won't last forever. Soon enough, Aphria will join the rally, and when it does, Aphria stock could explode higher.Investors have been relatively bearish on Aphria recently because the company's second-quarter earnings report, delivered in early January, missed analysts' average expectations, and the company, in conjunction with the results, cut its full-year revenue and profit guidance. But the miss doesn't tell the whole story.Aphria's trends are actually pretty good. Its quarter-over-quarter cannabis revenue growth and its QoQ cannabis volume growth accelerated compared with Q1's rates. Those two data points imply that demand for Aphria's cannabis is rising. At the same time, its cannabis gross margins improved tremendously, rising from 50% in Q1 to 57% in Q2. The data supports the idea that improving supply-demand dynamics are meaningfully lifting Aphria's margins.Aphria has all the momentum it needs to join the marijuana stock rally, as demand for its products is accelerating and its margins are expanding.Eventually, these improving growth trends, combined with the massively discounted valuation of APHA stock, will produce an epic rally by the shares.Analysts, on average, expect Aphria's fiscal 2022 earnings per share to be 40 cents. That estimate will prove to be conservative. My modeling indicates that improving demand and margin drivers will push the company's FY22 EPS to 50 cents or higher. Based on a forward earnings multiple of 20, which is average for growth stocks, my 2021 price target for Aphria stock is $10.The shares closed at $5.19 yesterday. The Bottom Line on APHA StockAphria stock has sat out the 2020 marijuana stock rally so far, but it won't remain on the sidelines forever. Instead, as soon as worries about the Q2 earnings report fade, the shares will start to climb higher. Given how cheap this stock is and how good APHA's fundamentals are, the rally will be huge and could reach 100%.As of this writing, Luke Lango was long CGC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 5 Dow Jones Stocks to Buy for 2020 * 7 Fintech ETFs to Buy Now for Fabulous Financial Exposure * 3 Tech Stocks to Play Ahead of Earnings The post Here's How Aphria Stock Could Double in 2020 appeared first on InvestorPlace.
Cronos (NASDAQ:CRON), the cannabis company best known for its multi-billion investment from Marlboro maker Altria (NYSE:MO) already is having a good year. Year-to-date, CRON stock is up more than 10%.Source: Shutterstock But Cronos is not alone. Pot stocks are bouncing back in 2020, with the ETFMG Alternative Harvest ETF (NYSEARCA:MJ) up more than 10% already through the first two weeks of the year amid favorable fundamental developments (a handful of marijuana companies reported strong numbers in early 2020) and legal developments (among other things, Illinois just legalized recreational marijuana).Here's my two cents: early 2020 strength in CRON stock will extend into a year-long rally for the resurgent pot stock.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMy rationale is simple. The whole cannabis sector will bounce back in 2020. As it does, Cronos will bounce back even more, because it represents one of the two highest quality investments in the space, and quality will become of increasing importance in this space as a clear divergence emerges between cannabis winners and cannabis losers.Net net, Cronos looks good in 2020. I think shares will head materially higher. Here's a deeper look at why. The Pot Stock Rebound Is for RealThe big rebound in pot stocks is more than a head-fake or dead-cat bounce. It's the real deal, and the start of something much bigger. * The Top 5 Dow Jones Stocks to Buy for 2020 The legal cannabis market will inevitably be huge. Drug usage data among U.S. high school students shows a clear trend: young consumers are increasingly smoking weed, and today, they smoke weed almost as much as they drink alcohol.The demand is there. The supply will get there, too, because consumer and government attitudes are rapidly shifting in favor of legalizing cannabis. Big demand plus big supply equals big market.How big? Well, if you consider that the global alcoholic beverage market is in the $1 trillion-plus range and that cannabis consumption among certain demographics is nearly equal to that of alcohol consumption, it's pretty easy to see the fully-legal global cannabis market measuring in the several hundred billion dollar range one day.Outside of Canopy Growth (NYSE:CGC), all publicly traded cannabis companies feature sub-$3 billion market caps.Clearly, these companies aren't priced appropriately. They aren't priced appropriately because investors got overly bearish in 2019 amid early challenges in Canada, the U.S. and elsewhere, and thought that these challenges would last forever.They won't. In 2020, they will fade. Demand trends will improve. Logistics will improve. Retail distribution will expand. Legislation will move forward. Everything will get better because everything is always better in Year 2 than in Year 1.Pot stocks will bounce back. And they will hold onto these gains, because the cannabis market will only get bigger and better over the next few years as it marches towards its several hundred billion dollar potential. Cronos Is a High-Quality PickIn the cannabis space, Cronos stock is a high-quality pick, and that's important because quality will be a key differentiation going forward.There are a lot of cannabis companies out there. Not all of them will survive. When you look at the alcoholic beverage and tobacco industries, the two best comps for the cannabis industry, those markets are essentially oligopolies, dominated by only a handful of conglomerates.The cannabis market will pan out no differently. It will go from hundreds of equally-sized players today, to a handful of super-sized players in a decade. This market consolidation means that while the cannabis market will grow by leaps and bounds over the next several years, this rising tide won't lift all boats; high-quality boats will rise a bunch, and low-quality boats will fall by the wayside.Cronos is unequivocally one of the high-quality boats in this space for one big reason: the multi-billion dollar investment Altria poured into the company.That huge investment is a vote of confidence from a seasoned and smart management team over at Altria. It's also enough money to shore up the balance sheet for the foreseeable future, absorb cash burn, and ease pressure on the company to cut corners to turn a profit.Most importantly, it gives Cronos ample resources to invest in the cannabis space over the next several years. Only Canopy can rival Cronos in terms of this investment firepower.Ultimately, then, CRON is one of the top two highest quality picks in the cannabis space. Thus, as pot stocks begin their multi-year rebound in 2020, Cronos will be at the epicenter of this rebound. Bottom Line on CRON StockIn a nutshell, what you have with Cronos is a sub-$3 billion company with a very reasonable opportunity to be one of the largest players in a potential several hundred billion global cannabis industry one day. That's a compelling long-term value prop.The market turned a blind eye towards this long-term value prop in 2019 amid near-term cannabis market challenges. In 2020, those challenges will fade from the scene. As they do, investors will increasingly adopt the long-term bull thesis as a consensus thesis. The more this happens, the more CRON stock will rebound.As of this writing, Luke Lango was long CGC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 5 Dow Jones Stocks to Buy for 2020 * 7 Fintech ETFs to Buy Now for Fabulous Financial Exposure * 3 Tech Stocks to Play Ahead of Earnings The post CRON Stock Could Ride the Cannabis Resurgence into a Year-Long Rally appeared first on InvestorPlace.
Despite waning investor optimism in the cannabis space, AdvisorShares CEO Noah Hamman says 2020 could be a big year for the sector.
Canadian cannabis producer Aphria on Tuesday reported a small Q2 loss while revenue surged 466%. Aphria fell sharply, but other marijuana stocks rallied.
The hits keep on coming for Aurora Cannabis (NYSE:ACB) stock. Amid earnings disappointments, management changes and sector pressure, Aurora stock continues to slide, reaching its lowest point in over two years this week.Source: Jarretera / Shutterstock.com There's a case to be made that the declines will end at some point. Balance sheet concerns are real but as I detailed last month, bankruptcy is an unlikely near-term outcome. ACB stock isn't "cheap," even below $2: considering Aurora Cannabis's debt and a market capitalization that's still near $2 billion, it trades at more than seven times its fiscal 2020 revenue estimates. But there's a huge opportunity for cannabis plays across the board, with regulatory improvements and "Cannabis 2.0" likely to boost demand in the Canadian market.And of course, the U.S. market looms. The Canadian market is attractive, and Aurora has operations around the world, but it's U.S. consumers who could really move the needle for ACB stock, and for the cannabis sector as a whole.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFederal legalization of cannabis seems likely at some point in the future, given steady progress at the state level. A regulated national market in the U.S. would support years, if not decades, of growth for the likes of Aurora, and justify what still look like reasonably high valuations across the sector. * The Top 15 Stocks to Buy in 2020 But it's becoming increasingly clear that Aurora Cannabis stock is not the play for investors bullish on the U.S. cannabis opportunity -- particularly not right now. That in turn creates a key question: if Aurora Cannabis isn't a U.S. play, are other, smaller, markets enough? The Catalyst Problem for ACB StockThe first issue with treating Aurora stock as a play on U.S. cannabis is that shifts in federal policy are highly unlikely any time soon. "The biggest legislative changes of 2020 will be the enforcement of existing laws," cannabis industry attorney Scot C. Crow of Dickinson Wright told InvestorPlace. And the upcoming presidential election will put a hold on any major changes to federal policy on marijuana."This will be a year of increased friction and enforcement as federal legislation largely stalls due to the presidential election cycle," said Crow. "IRS enforcement actions against legitimate state businesses could increase the possibility of meaningful federal action, but not realistically until after the election cycle."The SAFE Banking Act, which protects banks working with cannabis companies in states with legalized, regulated cannabis, passed the House of Representatives in November, but Senate passage seems unlikely in 2020, if at all. Instead, it's possible that the federal-state battle over cannabis will accelerate, according to Crow's prediction of "increased friction and enforcement" in 2020."Federal and state agencies enforcing existing laws will expose non-compliant state operators," Dickinson Wright Attorney Benton B. Bodamer told InvestorPlace. "Legitimate competition will bring risk of failure in select markets, testing state and federal enforceability of contracts and receivership and bankruptcy protections, even further than last year."If anything, state-level markets may look less attractive by the end of this year. We've already seen massive oversupply in markets like Oregon. As Bodamer notes, it's possible that producers will fail in response. Those failures could expose the issues, such as still-patchwork regulation and unsettled contract law, that persist in state-level markets.On the whole then, the U.S. cannabis market is likely set for a rocky 2020. And so investors buying any cannabis stock based on U.S. opportunities would do well to exercise patience until after the elections at least. Aurora's U.S. ExposureFor Aurora Cannabis in particular, the problem is more significant. Right now, the company simply doesn't have a path to a legitimate presence in the U.S. market.Aurora does have exposure to the American market in two ways. First, the company has an agreement with Australis Capital (OTCMKTS:AUSAF) to buy a significant stake in Australis in the event of U.S. legalization. Australis was spun out from Aurora in 2019, and primarily works in the U.S. cannabis market, including real estate assets. The existing partnership also suggests Australis could be a customer for Canadian-produced cannabis if U.S. regulations end up allowing for imports.Second, Aurora has a partnership with the Ultimate Fighting Championship mixed martial arts league to research the effects of cannabidiol (CBD) on athletes. That partnership, as detailed on Aurora's Q4 conference call, aims to "generate the data required to establish CBD as an accepted therapeutic ingredient."Per management, both efforts are part of a broader strategy focused on the U.S.Aurora Chairman Michael Singer said on the Q1 call that when the U.S. strategy is announced some time in the future, "it's going to be very clear as to how this ties together." The U.S. Problem for ACB StockBut investors should be highly skeptical of that statement. Aurora Cannabis's current U.S. presence isn't nearly enough. And it's hamstrung in its ability to expand into the U.S. in force.The two announced U.S. efforts are going to have minimal impact on ACB stock. Aurora's option on Australis is being affected by that company's planned merger with privately held Folium Biosciences, a deal that would give Australis just 11% ownership of the combined company. Aurora can only buy a piece of that equity -- or a low single-digit percentage of the merged business. Even if Australis and Folium combine to become a game-changer for the U.S. market, Aurora won't benefit enough to move the needle on ACB stock.As for the CBD opportunity, a research partnership is nothing close to an actual profit-generating operation. And the U.S. CBD market is a mess, with unclear regulation from the Food and Drug Administration (FDA) and a patchwork of state-level regulations. Even industry leader Charlotte's Web (OTCMKTS:CWBHF) has seen its stock decline 71% just since Aug. 5.And even if the market does become clearer, Aurora has no real edge and competition will be intense. Charlotte's Web, Cronos (NASDAQ:CRON), Canopy Growth (NYSE:CGC) and many others have their eye on the market. It's asking a lot for Aurora to outperform so many rivals, including companies that have already established supply and distribution chains when Aurora has not. The Cash IssueThere's another issue, of course: cash. Again, it doesn't seem like Aurora is going bankrupt any time soon, but it does need to conserve capital, and a decent chunk of the cash it's currently holding is going to be burned as the operating business runs at a loss. If Aurora Cannabis wants to enter the U.S. market in earnest, it will either have to spend big and build out its business or acquire an existing operator.Either option would be difficult, since Aurora just doesn't have the balance sheet for a big move, and raising more cash will be exceedingly difficult at this point. The company has already significantly diluted shareholders. Quality sellers are not likely to take risky ACB stock if they can get shares of, say, Cronos, still flush with cash from an investment by Altria Group (NYSE:MO).So it's quite difficult to see how Aurora Cannabis could enter the U.S. market in force any time soon. It doesn't have the leeway to make an acquisition, and it may not even have the capital to invest heavily by 2022 or 2024. Its existing domestic market presence is minimal.That seems like a significant problem for ACB stock going forward, especially when its peers do have U.S. optionality. Most notably, Canopy has a deal with Acreage Holdings (OTCMKTS:ACRGF) to enter the U.S. market in force as soon as federal legalization arrives. Cronos and even Tilray (NASDAQ:TLRY) will have dry powder to make their own moves.Aurora has no such luxury, with its share price depressed and balance sheet stretched. It will take years to fix both problems. And until then, investors bullish on the U.S. simply need to look elsewhere.As of this writing, Vince Martin did not hold a position in any of the securities mentioned above. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 15 Stocks to Buy in 2020 * The 7 Most Important Companies That Didn't Survive the 2010s * 4 Mega-Tech Stocks Reaching for the Sky The post Aurora Cannabis Stock May Already Have a U.S. Problem appeared first on InvestorPlace.
Last year, the cannabis trade was an absolute nightmare. Just about every company came under the crush of heavy selling like Cronos Group (NASDAQ:CRON), Tilray (NASDAQ:TLRY) and Aurora Cannabis (NYSE:ACB).Source: Shutterstock The main reason for this? Simply put, the legalization of cannabis in Canada was overhyped. It also did not help that there were problems with getting retail permits and that black market activities got worse.Despite all this, I think much of this has been baked into the valuations. In other words, there are some interesting opportunities for investors.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 8 of the Strangest Stocks Worth Your Time One that is a standout is Canopy Growth (NYSE:CGC) stock. It is a clear leader in the space, with advantages like the following: * The company has roughly $2.7 billion in the bank. This puts CGC in a strong position as funding has been drying up for cannabis operators. * Canopy has leading market share positions - of over 35% -- in Alberta, which is the most developed recreational market in Canada. There are also supply agreements with government agencies in ten Canadian provinces and territories. * The Spectrum Therapeutics medical subsidiary is a major player in the medical cannabis space, with about 75,600 patients. * There is about 5.4 million square feet of licensed capacity in operation in Canada.All in all, Canopy Growth stock has the benefit of tremendous scale, diversification and liquidity. Because of this, it seems like a pretty good bet that - even if the shakeout continues in the industry - the company will be a long-term winner. The Drivers for 2020One of the many dramas for Canopy Growth stock during 2019 was the termination of CEO Bruce Linton. The company's largest shareholder, Constellation Brands (NYSE:STZ), simply got fed up with the losses that were piling.So, the replacement for Linton will take the helm in mid-January. He is David Klein, who has served in senior leadership roles for the past 14 years at STZ. According to the press release:His capabilities include extensive CPG and beverage alcohol industry experience, strong financial orientation, and experience operating in highly regulated markets in the U.S., Canada, Mexico and Europe. David is an experienced strategist with a deep understanding of how to build enduring consumer brands while leveraging operational scale across a dispersed production footprint. He is a strong leader with a proven track record of developing diverse and high performing teams.Yes, these are the kinds of skill sets that will be crucial for the success of Canopy Growth stock. Initially, Klein is likely to focus on streamlining the organization to get on a path to profitability. But in the meantime, there are some catalysts that should help bolster growth.For example, the U.S. market is looking more promising. Because of the Agriculture Improvement Act of 2018, CGC has been able to introduce hemp and CBD offerings into the market (such as the First & Free line). This has been the result of investments in building a supply chain for hemp cultivation, processing and production.And if there is legalization on a federal level in the U.S., Canopy will be positioned to benefit as it has a partnership agreement with Acreage Holdings.That said, the Cannabis 2.0 opportunity is probably the most important catalyst for the company. This has legalized edibles in the Canadian market, which could be worth $2.7 billion based on research from Deloitte.CGC is definitely prepared. Keep in mind that it already has more than 30 SKUs submitted to Health Canada for vapes, chocolates and beverages. Bottom Line on CGC StockSince mid-November, Canopy Growth stock has staged a nice rally, going from $14 to $20. True, given the swirling uncertainty and continued problems in Canada, this gain could prove temporary. For the most part, volatility will probably continue.So, it's still advisable to not be too aggressive with Canopy Growth Stock. But if you have a longer-term perspective on things, I think gradually building a position does make sense right now.Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 of the Strangest Stocks Worth Your Time * 7 Stocks to Buy That Trump's Tax Cut Truly Rewarded * 5 Stocks That Could Double in 2020 The post Has the Smoke Finally Cleared for Canopy Growth Stock? appeared first on InvestorPlace.
Cronos Group Inc. (“Cronos Group” or the “Company”), an innovative global cannabinoid company, today announced that Mike Gorenstein, Chairman, President and Chief Executive Officer, will speak at the ICR Conference 2020 on January 14, 2020 at 9:00 a.m. ET in Orlando, FL. The presentations will be available on the Investors section of the Company’s website at ir.thecronosgroup.com/events-presentations. Cronos Group is an innovative global cannabinoid company with international production and distribution across five continents.
Tobacco giant Altria is trying to become less of a cigarette company, as demand fades for traditional tobacco products. Big bets on vaping, via a massive investment in vaping startup Juul, and even on marijuana, via a massive investment in a Canadian pot producer Cronos Group, have yet to pay off. Growing anxiety over vaping's potential health risks and lawmaker scrutiny have placed Juul directly in the cross-hairs.
Though 2019 was a brutal year for weed stocks in Canada and the U.S., that meant it was a stellar year for short sellers, who harvested nearly $1 billion from shorting the top 20 cannabis companies.
"I'm from the government and I'm here to help." These were the mocking words that former President Ronald Reagan used to describe government incompetence and inefficiency. In many ways, they perfectly describe the plight of Canadian cannabis firm Hexo (NYSE:HEXO) and other, more esteemed players like Cronos Group (NASDAQ:CRON) and Canopy Growth (NYSE:CGC). Indeed, government incompetence may be the biggest factor for why the Hexo stock price tanked in 2019.Source: Shutterstock One of the commonly cited explanations for the hemorrhaging in the Canadian cannabis market was the lack of fiscal credibility. Undoubtedly, all weed competitors enjoyed a compelling and overriding narrative: the transition of a black market into a viable (as in taxable) market. Generally, recreational cannabis is a personal, victimless endeavor. Thus, the rational thinking goes, both corporations like HEXO and the underlying government should benefit from it.However, investors aren't in the business of talking about their feelings at their local book of the month club. Rather, they may enjoy a good story but only to the extent that it brings about profitability. Unfortunately, most cannabis firms are far from being in the black. Instead, weed players eschewed profitability for growth. Wall Street accepted this for a while, driving up the Hexo stock price and similar investments.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut patience grew thin. As cannabis companies delivered disappointing earnings results, many stakeholders saw the writing on the wall. Making matters worse, many organizations, including HEXO, sought dilutive measures to continue their growth strategies. That was the last straw for the remaining believers, cratering the Hexo stock price. * 7 'A'-Rated Stocks to Buy Under $10 What turned a market which held so much promise into a veritable embarrassment? The answer: government inefficiency. Canada Doing No Favors for Hexo StockSource: Chart by Josh Enomoto Now, I'm not breaking new ground when I mention the Canadian government's role in hurting HEXO. Many analysts have cited the administrative backlog that has unnecessarily stymied the burgeoning weed market. However, performing a deeper dive into the subject reveals shocking inefficiencies that deserve consideration.For starters, the Canadian cannabis market is quite robust. In the first calendar quarter of 2018, 4.18 million Canadians ages 15 and older used cannabis. By Q3 2019, that figure grew to nearly 5.2 million. By itself, this is good news for Hexo stock. However, the year-over-year growth rate in the trailing three quarters slipped from 27% to 14%.This slowdown in growth suggests that external factors are weighing on cannabis usage. In my opinion, the biggest such factor is the irrational distribution of marijuana licenses across Canada's provinces.If you look at the market share of cannabis usage by province in the above chart, you'll see that Ontario makes up the lion's share of pot users. Between Q1 2018 through Q3 2019, Ontario took an average of nearly 41% market share. No other province comes close.Yet as of October 2019, Ontario had 75 cannabis stores that were approved and open for business (or scheduled for such). However, Ontario also has over two million cannabis users. Thus, each store serves a whopping 26,972 users. To put this into perspective, that's well more than the average per-game attendance of U.S. professional soccer.Now consider British Columbia. It has 830,000 cannabis users but 104 stores to serve them. That's just under 8,000 users per store. Surprisingly, the city of Calgary now has 200 stores, but only 1.34 million residents. If we assume 17% of them are cannabis users, that translates to 1,139 stores per user.Something is very wrong here! Risky but CompellingBefore you jump into Hexo stock with reckless abandon, let's note the obvious: cannabis stocks remain a mess. Furthermore, all the criticisms that have been leveled at the sector at least have a ring of truth to them. Finally, the fiscal stability of most sector players hardly offers a reason for confidence.Again, narratives are great, but they have a time limit. Right now, Wall Street is in no mood to hear more stories.However, the case for Hexo stock is a compelling one because of the unnecessary government-level headwind. In all likelihood, if the country's regulatory agency had focused more time on approving applications from high-volume markets like Ontario, HEXO and others may look a lot different today.From another angle, the Canadian market has a hidden catalyst that is going untapped. Should the government apply the hard lessons learned, Hexo stock could make a comeback. If you have the stomach to endure choppiness and volatility, this is a name to watch for 2020.As of this writing, Josh Enomoto is long Hexo stock. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 'A'-Rated Stocks to Buy Under $10 * 7 High-Yield Dividend Stocks for Growth and Income in the 2020s * 7 Tech Stocks to Buy As the Trade War Ends The post What Hexo Stock Needs Is Some Old-Fashioned Reaganomics appeared first on InvestorPlace.
Hexo raised $25 million through a share offering, two days after it revealed a write-down and corrected some accounting errors, while recreational weed went legal in Illinois.
Following 2019's collapse in marijuana stocks, many companies in the U.S. and Canada don't have enough money in the bank to get through the next 12 months.
The legalization of weed in Illinois has been well received by consumer spending with nearly $20 million on marijuana products being sold in the first 12 days. High Times CEO Stormy Simon joins On The Move to discuss.
Aurora's stockis climbing as Cowen expects the cannabis company to focus on controlling capital spending and restructuring its debt. Yahoo Finance's Emily McCormick joins Seana Smith on The Ticker to discuss.
Legalized weed is proving a boon to midwest coffers. Yahoo Finance's Julie Hyman, Adam Shapiro, Dan Roberts, Constance Hunter KPMG Chief Economist and Stormy Simon High Times CEO discuss.
Aurora Cannabis landed in the red Friday morning after a Piper Sandler analyst downgraded the stock to ‘sell’. Yahoo Finance’s Alexis Christoforous joins On the Move to break down the details.
Illinoians are still celebrating the legalization of recreational marijuana sales across the state, which kicked off on New Year’s Day. Cresco Labs CEO & Founder Charlie Bachtell joins Yahoo Finance's Zack Guzman and Julia La Roche, along with "The Morning Brew" Business Editor Kinsey Grant, to discuss.
2020 marked the first day of legal weed sales in Illinois. Yahoo Finance's Zack Guzman and Heidi Chung discuss the impact for businesses with Former LVMH Chairman of North America Pauline Brown on YFi PM.