Investing In The Canadian Cannabis Market
Are you looking for ways to invest in marijuana stocks in 2021? Many new investors are trying to find the best cannabis stocks to buy right now. One area of the market that has seen the most market volatility is the Canadian marijuana sector. In Canada, cannabis companies have gone through many changes in the past year. Currently, mergers and acquisitions have changed the landscape of the top Canadian marijuana stocks to watch.
So far in 2021, this area of the market has achieved the most upward momentum so far this year. In the first quarter of 2021 Canadian pot stocks rallied in the market until February 10th. Since that time the cannabis sector has experienced a steep decline in market value. In many ways, this drop in value could be a good opportunity for new investors to establish a position in the market. From current levels, most Canadian cannabis stocks could produce significant gains for investors.
At the present time, Canadian cannabis companies are establishing a way into the US cannabis market. Although these companies are now waiting for the US federal government to pass cannabis reform most have already established a strategy. In addition, Canadian cannabis companies have also been growing an international footprint which could be a source of global revenue for years to come for these companies.
Growth Potential For Canadian Marijuana Companies
In 2020 Canadian cannabis companies have shown significant revenue growth. According to Headset Canadian cannabis sales are projected to be $4 billion in 2021 and are expected to grow twice as fast as the US cannabis market through 2022.
From current market levels, Canadian cannabis stocks would see a significant upside pushing back up to February highs. In essence, this could be a good time to find the best Canadian marijuana stock to add to your watchlist for 2021. Finding the best cannabis stocks to invest in takes due diligence on the part of the investor.
Researching cannabis company’s finances and observing the stock’s performance can help investors establish better positions for their investments. Because marijuana stocks are known for market volatility some investors find it difficult to stay in long-term positions in the sector. In reality, at current levels, the cannabis sector could produce both short-term and long-term results for traders. With this in mind, let’s take a look at 3 Canadian marijuana stocks to add to your watchlist in May.
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Marijuana Stocks To Watch:
- Canopy Growth Corporation (NASDAQ: CGC)
- Aurora Cannabis Inc. (NYSE: ACB)
- HEXO Corp. (NYSE: HEXO)
Canopy Growth Corporation
With the Canadian cannabis sector trading lower than it started in 2021, we have to look at Canopy Growth Corporation. As one of the largest Canadian cannabis companies, it produces one of the widest varieties of products for medical and recreational use. With a partnership and backing from Constellation Brands, Inc. (NYSE: STZ) the company has established itself as a top-tier cannabis leader. In its, most recent financial results Canopy produced third-quarter fiscal 2021 record net revenue of $153 million. Another important forecast the company recently gave is that it expects to achieve profitability in 2022.
In April Canopy has been rapidly expanding its presence in Canada and the US. To the north, the company entered into an agreement to acquire Supreme Cannabis Company, Inc. (OTC: SPRWF). And in the US a distribution agreement with Southern Glazer’s & Spirits will help launch its CBD beverage portfolio. Specifically, Canopy plans to launch Quatreau the first line of CBD-infused drinks the company is introducing to the US market.
CGC stock is down 1.87% year to date closing on May 11th at 23.91. In February CGC stock set a new high of $56.50 and is down 16.58% in the past month. According to analysts at CNN Business CGC, stocks have a 12-month median price target of $30.93 per share. This would represent a 29.36% increase from current levels. With this in mind, CGC stock could be a top Canadian marijuana stock to add to your watchlist right now.
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Aurora Cannabis Inc.
A global leader in the cannabis industry Aurora Cannabis Inc. is established in both the medicinal and recreational consumer markets. The company will announce third-quarter fiscal 2021 results On May 13th after the close. In Aurora’s most recent earnings the company produced Q2 fiscal 2021 total net revenue of $70.3 million up 11% compared to Q2 of fiscal 2020. Currently, most of Aurora’s revenue is driven by the company’s international medical cannabis sales. In fact, this segment increased by 562% from the year prior showing significant growth globally.
Recently some analysts have lowered their rating on Aurora ahead of its earnings and expect the stock to underperform its competitors. For Aurora much is weighing on this next earnings report on Thursday. As the company continues to attempt to control its substantial losses there are developments that could help the company in the future. With significant growth on the global level, Aurora could begin to turn things around for its investors.
ACB stock is trading at $8.10 as the trading day begins on May 12th Relatively flat year to date ACB stock has a high of $19.68 in February. According to analysts at Tip Ranks, ACB stock has a 12-month average price forecast of $8.31 per share. In essence, this represents an increase of 2.59% from current levels. In general, ACB stock could be a stock to watch for a better entry point as the stock continues to drop in value.
HEXO Corp.
Establishing its presence in the global market is HEXO Corp. a leading consumer-packaged-goods cannabis company. Recently, the company has expanded its distribution lines and plans to deliver new HEXO products to the global market in 2021. In its most recent earnings report, HEXO produced Q2 and fiscal 2021 total revenue of C$32.8 million. To put into perspective, this is an increase of 94% for the same period the year prior. In addition, the company saw non-beverage Canadian adult-use revenue increase by 72% from Q2 of fiscal 2020.
This year HEXO established a partnership with Molson Coors to launch a line of cannabis-infused beverages under the name Truss Beverages Co. In May HEXO announced an at the market offering of up to C$150 million. In general, the company expects to use the proceeds for general corporate purposes which include US expansion, capital expenditures, possible acquisitions, and improvement to any facility the company acquires.
HEXO stock is trading at $6.41 in the first half-hour of May 12th. In February HEXO stock reached a high of $11.04 and is up 96.20% year to date. According to analysts at Tip Ranks HEXO stock has a 12-month average price target of $8.74 per share. In essence, this would represent an increase of 35.71% from the current trading value. For this reason, HEXO stock could be a top Canadian cannabis stock watch this week.
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