Can These Leading Pot Stocks Build More Momentum Before Next Year?
2020 has been an interesting year for marijuana stocks, to say the least. With the effects of COVID and other geopolitical factors wreaking havoc on world markets, how have pot stocks performed? Well, the short answer is quite well. Since mid-March, leading marijuana stocks like Canopy Growth Corp. (NYSE:CGC) and Tilray Inc. (NASDAQ:TLRY) have climbed in value in the double digit percentage points. While these gains have been felt throughout the entire cannabis industry, we can’t say for certain how long this bullish sentiment will go on.
What we do know is that the future of the cannabis industry remains quite bright. It seems as though many investors believe in the next five to ten years of marijuana stocks. With that, we can begin to find companies that align with our portfolio strategies as well as where we think the cannabis industry will go at large. Although investing is always a gamble, the cannabis industry is one of the fastest-growing sectors on the planet. For that reason, let’s take a close look at some marijuana stocks to hold for the end of 2020.
A Leading Ancillary Pot Stock to Watch
Scotts Miracle-Gro Inc. (SMG Stock Report) is one of the most popular ancillary pot stocks in the industry. Because it does not have a direct tie to marijuana stocks, SMG stock has remained less volatile than many others. Instead of being a pure-play pot stock, Scotts Miracle-Gro works by supplying gardening supplies to the retail market. The company has been working with greater demand since the advent of the COVID pandemic.
With more people at home than ever before, more people are gardening than in many years prior. In addition, more people are growing marijuana at home, making SMG stock a crucial COVID pot stock to watch. The company recently announced that its sector should grow in the 10% range for fiscal 2020. But, outside of Scotts’ own business is its subsidiary Hawthorne Gardening. Hawthorne was created to help target the hydroponics market specifically.
In the past few years, Hawthorne Gardening has helped to supply a large amount of earnings to SMG stock. In addition, Scotts acquired Sunlight Supply a year or two ago, which has helped to give it more product diversity than most other similar companies. For fiscal 2020, Scotts has stated that it expects to see around 50% growth in its sales. With Hawthorne accounting for almost 20% of Scotts total sales, the company remains an avid player in the cannabis industry.
A Top Performing Marijuana Stock to Watch
Neptune Wellness Solutions Inc. (NEPT Stock Report) is one of the top performing marijuana stocks in 2020 thus far. Since March, shares of NEPT stock have shot up by as much as 75% which is quite substantial. And, as a NASDAQ listed pot stock, Neptune Wellness has seen more popularity than most other companies in the industry. One of the main reasons that NEPT stock has seen so much growth is that the company is part of the growing derivatives market. In Canada, derivatives were only legalized this year. With so much demand for these products, Neptune has been able to capitalize on this area of the cannabis industry.
During its most recent third quarter, NEPT stock announced around $2.8 million in processing revenue. This is more than double what it did in the previous quarter. The company has also been working to convert some of its production to producing hand sanitizer to help fight the pandemic. Its 24,000 square foot facility in North Carolina should be ready to ship as much as 1 million units of hand sanitizer per week. This should help to make NEPT stock’s business model even more diverse in the coming months.
A Canadian Cannabis Producing Pot Stock
HEXO Corp. (HEXO Stock Report) is one of the leaders in the Canadian cannabis-producing industry. Because of its penny stock status, HEXO stock is quite attainable for most investors. In its most recent third quarter, the company stated that it sold almost 10,000 kilograms of cannabis to the adult-use market in Canada. That number represents almost 50% more than the previous quarter. After it was announced, HEXO stated that its “newly launched products such as hash and oil extract drops also contributed to overall adult-use sales growth.”
In the past few months, Canada has not seen as much demand increase as the U.S. has due to Covid. Because of this, many Canadian marijuana stocks have underperformed. But, it looks like Canadian pot stocks are ripe with potential as the market there is only just beginning to pop off. The hopes are that HEXO stock can continue to perform quite well amidst overall market uncertainty. With that, HEXO stock remains a leading marijuana stock to watch.