2019 was without a doubt, a rough time for marijuana stocks. With 2020 in full effect, investors are searching for their best way to make a profit. Currently, there are some major challenges across the North American cannabis landscape that will take time to be resolved. These issues include high taxes and a lack of proper cannabis policy to name a few. If these issues can be resolved this would help to push the boundaries of pot stocks moving forward. So as the cannabis industry works to solve these, currently, there are a handful of companies that may end up in the black this year. These companies are spread out between Canada and the U.S.
Canada is currently working on two main issues within its cannabis market. The first is the concern about the supply issues Canada met toward the end of 2019. Pot stocks have faced this issue by increasing the production of cannabis. With higher cannabis production comes a greater necessity for capital. The result of this short term-capital puts some of these Canadian companies in the red until a profit is made. Investors don’t expect this to last forever, but as of now, this is the case. As mentioned before, there are a few notable pot stocks that are close to turning a profit potentially by the end of the year. Investors should note that nothing is concrete and the industry is always changing. With that in mind, these two pot stocks mentioned below have high hopes for a solid 2020 year.
Marijuana Stock To Watch: A Major Cannabis Grower
Village Farms International (VFF Stock Report) is one of the major Canadian cannabis growers. Estimates show that the company should turn a profit this year. The projections from Wall Street show around CA$0.63 in earnings per share for the year. It is also worth noting that Village Farms doesn’t just grow cannabis. The company began its operations as a vegetable grower before realizing the margins for growing cannabis. It still is involved in growing vegetables as well as hemp, which means that it is not a strictly pure-play pot stock.
One of the main driving forces for the company’s growth is its partnership with Emerald Health Therapeutics. This joint operation currently includes a 1.1 milling square foot facility based in British Columbia. Once it is fully up and running, the facility should be able to produce as much as 75,000 kilograms of cannabis per year. Additionally, the company has plans to open a second facility that would produce an equal amount to the first grow facility. If Village Farms can get a second grow site up and running they will have the ability to produce up to 150,000 kilograms per year. With the company staying hard at work, Village Farms International continues to illustrate its potential in the market as well as marijuana stock to watch.
Will This Pot Stock Start To Catch Momentum
MediPharm Labs (MEDIF Stock Report) (LABS) is an extraction based pot stock. This means that the company produces cannabis extracts to either to sell on its own or to help other growers who are looking for help with the extracting process because they don’t have to ability to do so. Wall Street expects MediPharm to produce CA$0.15 per share gains for this year. MediPharm has two key factors going for it.
First, cannabis extracts only became legal in Canada this year. This means that there is a lot of untapped potential in this area of the market. Second, extractions offer much larger margins than traditional cannabis. The company currently has a series of contracts that will help build the company’s business. MediPharm is shooting for as much as 500,000 kilograms of cannabis extracts every year. This should help to bring it into the top tier of extraction based service providers.
As the Canadian cannabis market inevitably changes, profits remain an important sign of growth. Investors should continue to keep an eye out for companies that are innovators in the market as time goes on.