Tag: cannabis stocks

  • Cannabis Stocks Could Bounce in 2020

    Cannabis Stocks Could Bounce in 2020

    Cannabis Stocks Could Bounce in 2020
    Cannabis is now legal in many countries and their number will increase. Public support for cannabis legalization is undoubted. That all can provide cannabis stocks to jump in 2020.

    Even though the cannabis sector gets knocked down almost on a daily base, some pot cannabis stocks could bounce in 2020. Yes, Canadian sales missed expectations after the legalization of recreational use of cannabis and remained to stay limited globally.
    But the Canadian sector could have a great stimulus in 2020 with the Cannabis 2.0 rollout. Also, the retail store number increase is one of the trump cards. For example, Canopy Growth plans to open 40 retail stores a month during 2020 in Ontario. Great plan, indeed but will the government really open up the market to such a huge development?
    The stock market wasn’t good in 2019 for cannabis stocks, and investors have to look at the chances of beaten-down stocks. But we truly believe that some of the cannabis stocks could bounce in 2020.

    One of them is the Cronos Group (CRON)

    The Cronos Group missed out on revenue estimates for Q3. It was $1.3 million lower. The stock followed the company’s “success”, it also has dropped and hit the new lows.

    The important fact is the company still grew revenues gradually generated $29.4 million in revenues for the last nine months. Also, the company raised up the production but investors didn’t see the benefit from that. Actually, they were very disappointed by the fact that Cronos sold 8x the kilogram in September but at half the net revenue per gram. But the company ended the third quarter with $1.14 billion on the balance sheet while the company’s value was $0.7 billion. So, this cash flow is Cronos’ main advantage.

    It gives the company an opportunity to invest further while the majority of the rivals don’t have such a possibility. CRON has an optimistic Buy consensus rating from Wall Street. Moreover, the average analyst price target is $13.45 and the last closing price was at $7.14.

    Tilray (TLRY) Cannabis Stocks Could Bounce

    Tilray is one of the most popular cannabis companies in the world. The popularity came from an unusual event after its IPO. What happened? The crazy prices followed the IPO with the stock price over $300 shortly after IPO.
    Tilray was the first cannabis company in history to list directly on one of the major US exchanges at $17 per share. Only a few weeks later, the stock price hit the insane price of $300 per share. It was the hottest IPO in 2018. 

    But the year after…

    The average net selling price per gram dropped to $3.25 last Q3, the prior price was $6.21. A gross margin of 31%, the adjusted EBITDA loss of $23.5 million, and only $122 million in cash are weak results.
    But Tilray appears well-positioned in combination with the InBev JV which may be catalysts in 2020 and make these cannabis stocks could bounce.

    The 2020 revenue estimates are only at $316 million but the stock has picked analysts’ optimism. They forecast a possible upside of over 40% and the stock price at $29.57. There is hope for Tilray.

    OrganiGram (OGI)

    OrganiGram Holdings is down from the high above $8 in May it falls to $2.5 on December, 24 but it is 1.62% more than the previous close price.

    The day before, the company announced the first of its ‘Cannabis 2.0’ products have been released. Trailblazer Spark, Flicker, and Glow 510-thread Torch vape cartridges, filled with C0₂-extracted cannabis concentrate oil and botanical terpene. 

    Some unpleasant events occurred before this announcement.

    For the quarter ended in June, OrganiGram generated revenues of $24.8 million. Everyone was expecting a great year. Instead, shipments fail to $20.0 million, the company was faced with $3.7 million in provisions, and the company forecasts revenues of only $16.3 million. The EBITDA profits were shifting into the loss.

    Now, OrganiGram could raise more cash.

    That’s the reason why the stock has a ‘Strong Buy’ rating. Analysts are predicting an upside potential of 225% from the current price of $2.5.

    Bottom line 

    Why Traders Paradise is so sure that any cannabis stocks could bounce in 2020?

    First of all, cannabis sales will increase.
    Cannabis is now legal in more-than-ever countries and their number will increase. Some experts state that the cannabis industry has the potential to advance to $130 million per year soon. This isn’t likely to happen in  2020, but this number figure out how fast the industry is growing.

    Public support for cannabis legalization is undoubted. The public is more aware of the potential benefits of cannabis. Also, we can expect new strains of cannabis. Moreover, cannabis-infused products will become more broadly available, and some of these products will be produced by companies that are well-known in the drink industry. For example, Molson-Coors and Coca-Cola both are considering to produce drinks with CBD.

    Experts found that cannabis can have important benefits for people’s general health. For example, cannabis can potentially lower cancer risk. Moreover, cannabis is much safer than alcohol. Right?

    All this put together, the cannabis stock could easily bounce in the year ahead.

  • Get Into Cannabis Investment

    Get Into Cannabis Investment

    Get Into Cannabis InvestmentMore and more countries allow medical and recreational use of marijuana. But the inconsistent set of rules and regulations cause that the companies involved in cannabis have problems.

    Yes, it is time to get into cannabis investment. Despite many problems, volatility or lack of legislation, this industry is still alive.
    It is in better condition now than 10 or 12 months ago. The companies are stronger, they have the market experience, they are developing, new retail stores are opening. Good news is coming from Canada, where in line with the second phase of legalization cannabis derivatives will find their place on the store’s shelves.

    Also, it seems that the US is one step closer to a broader legalization law. 

    For investors, this means it is time to get into cannabis investment. It is always better to invest in the early stage of some company, the stocks are cheaper and speaking about cannabis companies, they are progressing. Their full potential is coming. So, think, maybe right now is time to get into cannabis investment.

    Expect Big Profits

    One more reason why is time to get into cannabis investment is that this industry easy could grow to over 30 billion next year. Try to look at these companies as innovative start-ups but well established. They are covering a broad of sectors: growers, suppliers, pharmaceuticals.

    Their products are for the therapeutic and recreational markets as well. And the appearance in the market is changed. In the early days, these stocks were very cheap (actually they are but it is an advantage) and many companies didn’t survive due to various reasons. But those who did make it are strong and became the publicly traded companies today. 

    Yes, there are notable limitations on how investors can get in the cannabis investment. For example, marijuana is still illegal at the federal level in the US. So, the companies that are dealing with marijuana directly are not traded on the NASDAQ or NYSE. 

    The investors may buy the stocks of companies that are operating in other countries, for example in Canada or giving the service to the business but don’t have any contact with products. You can find that situation in the US.

    Nevertheless, investors’ interest in cannabis stocks is huge. Let the facts to speak. Publicly listed cannabis stocks have large increases in share value, some companies surpassing a billion dollars of market capitalization. 

    Is this the right time to get in the cannabis investment?

     

    Get Into Cannabis Investment

    It’s the typical growth stock puzzle. These companies have grown revenues and earnings. On the other side, they are still developing and expanding which means they are spending a lot on that. Do you have the guts to buy early? 

    Think, is it better to buy now or when the companies receive a new money infusion and the stock price jumps? If you wait for that to happen you will have fewer opportunities for a large profit.

    Just pay attention to how companies define the problems that blocked them to have better results. If they do it with due diligence and clear, without any doubts, it is time to get into cannabis investment. But remember, you have to be patient. Plan your trades correctly and don’t let be influenced by rumors and emotion.

     

    Bottom line

    Despite the fact that it isn’t clear which cannabis stocks will be long-term winners, investors shouldn’t avoid them. Currently, all cannabis stocks are suffering. The whole industry is in problems. And there is one more tricky part. Until the lawmakers and regulators change the attitude toward marijuana there are small possibilities to be different, the industry will have losses and the dark market will grow
    Investing in cannabis needs more regulatory, that’s true.
    Until then, watch the companies, do your homework and examine the stock, buy while they are cheap and wait and take a profit. This is the right time to get into cannabis investment.

     

  • Cannabis Stocks Are Not All Equal For FDA

    Cannabis Stocks Are Not All Equal For FDA

    Cannabis Stocks Are Not All Equal For FDA
    FDA sent numerous warnings about the CBD, substance found in cannabis.
    The stock prices of important cannabis stocks are dropping on a new warning from the FDA.

    By Guy Avtalyon

    Cannabis stocks are under attack. On Tuesday the US Food and Drug Administration (FDA) published new guidance on CBD. FDA notified that CBD can cause liver damage and also, some other injuries might be caused by using CBD.

    This information caused blast to the medical cannabis producers especially among those publicly listed on markets. Those companies have plans, they are investing in development, researching, and have licenses. We are talking about Canadian producers and their investors that were looking for the area for selling cannabis products and the US seemed to be that one. And now FDA issued a statement that their products are not safe for humans. Okay, even if it is true, how FDA can explain that GW Pharmaceutical’s CBD products are safe. This isn’t an attack on GW Pharmaceutical, it’s contrary, why other companies are forbidden to make health claims for its products use. 

    The FDA announced late Monday it is pointing on 15 private companies that are illegally selling products with CBD.
    The regulator said, “there is very limited available information about CBD, including about its effects on the body.”

    What is CBD?

    CBD is a non-intoxicating cannabis compound but it lives in regulations’ vacuum. FDA has approved GW Pharmaceutical’s GWPH drug that contains CBD, a drug for the treatment of childhood epilepsy but, FDA told the other producers that they have no permission to include this ingredient to food or drinks. The reasons are already mentioned.

    “Not so fast,” wrote MKM analyst Bill Kirk. “The FDA’s statement includes some balloon-bursting language,” MarketWatch reported.

    Cannabis stocks were crashed again on Tuesday. That was the signal for analysts to make new estimations and to update the previous.

    Cannabis legalization is slow both in Canada and the US. That causes the black market to grow, while the legal companies are struggling to increase revenue and become profitable. Some of them had to cut selling, cancel the agreements, and save the cash for the following days in expectation for the issue to be solved. 

    But investors have different sentiment and the stock prices of these companies are dropping.

    FDA influences the price of cannabis stocks

    The FDA’s update is in line with a note from the regulator’s former commissioner, Scott Gottlieb. He tweeted: “FDA’s actions on CBD show any available pathway – FDA issuing a regulation, new dietary ingredient notification for supplements, or a food additive petition for human or pet food – will require extensive studies and industry data to address serious safety concerns identified by FDA.”

    Extensive studies? Okay. Is there anything that they are working on? If yes, tell them to hurry up, the health benefit is in question. Tell them to have in mind a relief of pain and mental suffering. How about that?
    And, what they were doing for all the time? Haven’t yet find anything about cannabis? So many studies are already done. 

    The most important cannabis stocks trade in CBD products. Some of them were failing in trading after the FDA’s announcement. Canopy Growth fell by a bit more than 1%, and Tilray was falling by 3%. But they are connected to the section. The worse came for Charlotte’s Web which stock was down by almost 8% and we are speaking about the leader in the CBD market. 

    One stock was especially successful on that day. GW Pharmaceuticals was up. 

    Cannabis Stocks Are Not All Equal For FDA
    (The image was taken on Nov 27.)

    Guess, it has FDA approval for selling the CBD products. GW Pharmaceuticals is a unique one. Yes, their stock price was only slightly up, if the rise of 1.62% is slight. But still.
    The FDA said the next step is to make a framework to allow companies that are producing CBD-based goods to deliver them to the market. Oh, yes, they have to wait for clinical trials. Only after that, the market will be opened to them.
    Until then, investors will sell in panic cannabis stocks or hold them till the better times.

     

  • Will Marijuana Stocks Go Up In Smoke?

    Will Marijuana Stocks Go Up In Smoke?

    Marijuana stocks go up in smoke
    Shares of Aphria (NYSE: APHA), Canopy Growth (NYSE: CGC), and Tilray (NASDAQ: TLRY) dropped by 13.8%, 9.9%, and 12.6%, on Thursday. 

    By Guy Avtalyon

    It was a bad day, will marijuana stocks go up in smoke. All three stocks felt after HEXO declared discouraging preliminary fiscal 2019 last quarter revenue. Its outlook for fiscal 2020 is going to be very bad. How HEXO bad news influenced Aphria, Canopy Growth, and Tilray to big declines?

    HEXO expected to report net revenue between 14.5 million and 16.5 million Canadian dollars on October 24. This result is considerably under the company’s expectations. Moreover, HEXO stated that “uncertainties in the marketplace” caused such bad results and that they expect their expectations for the next fiscal year has to be lessened. That caused investors’ concerns about Canopy Growth, Tilray, and Aphria pot stocks, also.

    The main problem for HEXO is the insufficiency of retail cannabis stores, also the chances of restrictions for some types of cannabis derivative products are the problem. And there are, according to the company’s statement “signs of pricing pressure.” And the other cannabis producers share their worries and have the same problems.

    Almost all of them reported delays in Canadian provinces launching retail cannabis stores. Canopy, Aphria, and Tilray are expecting to Cannabis 2.0 market to make an increase to sales. But those delays may crash their expectations. 

    Aphria is, let’s say that, probably in the best situation because the majority of its revenue comes from Europe, in fact from Germany.

    Aphria had completed its acquisition of CC Pharma GmbH in January this year. CC Pharma GmbH is a leading distributor of pharmaceutical products. That includes medical cannabis. They have more than 13,000 drugstores in Germany and throughout Europe.

    Canopy Growth and Tilray, and HEXO, still rely on Canadian marijuana sales.

    Will marijuana stocks go up in smoke?

    Despite the fact that some of these companies brought profits in some periods, the whole picture is different. Marijuana stocks aren’t profitable yet. It is still hard to estimate which of them will be winners in long-term meaning. So, the best way to handle these stocks is understanding that they are fast-growing, but still, they are not making the money. Pot stocks will not disappear but every investor should know that they are extremely volatile right now. If you want to buy pot stocks you must have a very high-risk tolerance. 

    The greatest risk of buying marijuana stocks is valuations. Share prices more reflect the stocks’ growth hopes. Since marijuana stocks aren’t yet profitable, evaluating the stock price and possible profit is more challenging.

    The risks connected to marijuana stocks are genuine and can’t be neglected. But as we already know, the risks should be compared with the possible profit that marijuana stocks give. 

    The cannabis industry is fast-growing. So, what we can expect is holding these stocks over time, investors will have gains and losses. But isn’t it the same with all stocks?

    Is investing in cannabis stocks risky?

    Investing in marijuana stocks is naturally risky, but some stocks are riskier than others. To avoid losses invest in a company with a wide range of operations, one that sells products in various countries which can be a competitive advantage, for example.

    On the other hand, it isn’t always smart to buy the stock with the lowest volatility today. They can be less volatile today but after a few months, they can be extremely volatile. Negative relationships over some periods can balance positive relationships over some other periods. That will make the overall volatility lower.

    Investors have to be focused on the business prospects of the company like they do it with stocks in any industry. So,  will marijuana stocks go up in smoke? No!

  • How to Invest in Marijuana Stocks?

    How to Invest in Marijuana Stocks?

    Marijuana Stocks and How to Invest
    Here are some tricks and tips on how to invest in marijuana stocks. They are in trend now.

    By Guy Avtalyon

    Marijuana stocks easily can be one of the most interesting industries in the coming decade. The sector is growing with very volatile stocks that can give possibly marvelous trades.  

    This sector is already expanding. But it may explode even more. We already have a lot of listed stocks, but new ones launching IPOs also.

    How to invest in marijuana stocks?

    Let’s be clear on what precisely a marijuana stock is.

    Marijuana stocks are the stocks of companies that are included in the marijuana industry. Such companies are focused on growing, others on selling, and some on researching marijuana. Marijuana stocks you can find under the name pot stocks. Not only producers or merchants businesses are pot stocks. Pot stocks also refer to companies that are servicing firms in the marijuana or cannabis industry, for example, distribution companies. Any company that acquires more than 30% of its income from any business linked with marijuana can be a pot stock.

    Tricks and tips

    The marijuana sector is really hot. So, you have to be aware that it is a volatile industry. This is the reason more to read and watch the news like any other stock. The news is important because that is what makes changes in the market. The truth is that the news can make an enormous turnaround in the market, the prices may jump or drop on news, the stock may be tremendous or useless thanks to the news.

    What you have to do is to watch your favorite marijuana stock tickers. Be very careful with that because some mistakes may appear.

    Is trading marijuana stocks easy

    It’s almost the same as any other stock. Use the charts. By using stock charts, you’ll be able to know where to enter a trade, where to set stop-loss order, what is the market sentiment about your stocks. A lot of data you may gather from charts.

    To know how to invest in marijuana stocks you have to watch a stock scanner to find trade setups that match your standards and your goals. But one suggestion first. Since there is a bulk of marijuana tickers tracking all of them is simply wasting your time by watching all of them. Moreover, there is no need to do so since we have the technology to work for us. Yes, I am talking about stock scanners. All you have to do is to set up the criteria that you are looking for and after a few clicks, the technology will do the rest.

    Adjust your portfolio to trade long and short. Of course, if you are an investor and not a trader, you don’t need this. Just buy and hold, you are already long and you are waiting for the price to rise. But if you are a trader, to be short means that you have to borrow the stock, sell them at a higher price and wait for the price to drop, and buy the stocks again at a lower price.

    In the coming years, the marijuana industry might grow. But with stocks, we are talking about winners and losers. To be honest, it is much easier to find dropping stocks. So, the short-selling can be very tricky and you must have a really good strategy and be well educated to practice this.

    How to find good marijuana stocks? 

    The main problem is that most investors habitually don’t have access to adequate sources to estimate a company. But still, there are choices. For example, you can invest in ETFs. There you can find pre-selected marijuana stocks. 

    Teams of analysts paid the required attention and chose to add some companies in these ETFs. The other solution is to engage some advisors and stock pickers.

    Whatever you decide to do, keep in mind that marijuana stocks are volatile.

  • Cannabis earnings – the countdown started

    Cannabis earnings – the countdown started

    The cannabis earnings potential is huge
    The cannabis industry is more than ever in investors focus

    by Gorica Gligorijevic

    Cannabis earnings is promising. This week can be very important for the cannabis industry. The time to post financial results is near. So, we will see their records for the last quarter. Aurora Cannabis is a top producer, but maybe some other marijuana stocks can generate more next year.

    First in line to show the last quarter result are:

    Greenlane Holdings Inc (NASDAQ: GNLN), Medipharm Labs Corp (OTC: MEDIF), and Village Farms International Inc (NASDAQ: VFF) they did it on Monday after the closing bell.

    Today, the results from Tilray Inc (NASDAQ: TLRY) will be shown. It is expected Tilray to record a net loss of 25 cents per share and its revenue to be of $41.11 million. Today also, earnings result from Green Organic Dutchman Holdings Ltd (OTC: TGODF), Acreage Holdings Inc (OTC: ACRGF), and Flower One Holdings Inc (OTC: FLOOF) are coming after the market close.

    On Wednesday, Aug. 14, Aleafia Health Inc (OTC: ALEAF), Jushi Holdings Inc (OTC: JUSHF), and Helix TCS Inc (OTC: HLIX) have to post their earnings reports. They are followed by Canopy Growth Corp (NYSE: CGC) and Trulieve Cannabis Corp (OTC: TCNNF) after the closing bell.

    This is a busy week for cannabis companies. Investors seem ready to reward good companies. The main criterion among investors is the company can gain a profit. But, they are more than ready to punish the ones that don’t.

    Cannabis earnings will rise

    The cannabis industry is a big-money market. With legalization in more countries than it is now the case, it can be one of the most valued markets. I know there will still be the black market and a lot of money will go there, frankly more than in the legal markets. But still, this market could produce more than $250 billion in the next 10 or 12 years, counting the annual average sales, of course.

    That sounds pretty good for long-term investors. So, I feel free to suggest to you some companies to watch in the future.

    As the first Aurora Cannabis as a top producer. 

    It is the most trustworthy cannabis company among millennial investors. This data comes from Robinhood, an online app for investing with over 6 million users. The majority of millennial investors are Robinhood users. That put Aurora to the most-held stock online investment. It is reasonable to expect that millennials will take a bigger part in the world of investment in the future and support legal cannabis growth. It is easy to evaluate the reasons behind investors’ decision to invest in this company.

     

    Aurora is leading the world production of cannabis with an annual production of 150,000 kilos. It plans to reach 625,000 kilos of annual output in 2020. And it isn’t unreasonable. By engaging the full production capacity, Aurora can produce 700,000 kilos of marijuana on the annual range.

    Wall Street anticipates Aurora can be one of the best revenue generators in 2020 and capable to deliver about $518 million in sales per year. 

    The potential of cannabis earnings

    There are not too many pot stocks in the arena that could hit this expectation. But, Wall Street predicted three cannabis stocks able to surpass Aurora Cannabis in 2020.

    Curaleaf Holdings is expected cannabis earnings at $900 million in 2020 sales but with a cash-and-stock deal for Grassroots, which will bring to it about $350 million, let’s say Curaleaf Holdings may generate about $1,250 million.
    Also, pay attention to Cresco Labs, the potential of $715 million sounds good as Canopy Growth with $521 million.