Investing In The Cannabis Industry In 2021
Are you looking for the best ways to invest in top marijuana stocks in 2021? For the most part, the cannabis sector is trading in the red giving back some of the gains from earlier in the week right now. For more than five months top cannabis stocks have seen declines in the market after reaching highs in February. Although they have shown signs of momentum they continue to consolidate at lower levels. As a result, most top pot stocks are trading close to some of their lowest stock prices in 2021.
For new investors looking for ways to invest in cannabis, this could be a good time to find the best marijuana stocks to invest in for 2021. Although marijuana stocks have not performed in the market quite well leading cannabis companies are delivering strong revenue growth in recent financials. In Canada, the cannabis industry continues to grow and some of the leading cannabis companies have begun to see better balance sheets during recent earnings. In 2021 Canadian cannabis stocks saw the most gains in the first quarter. After reaching highs in February, they have since seen the steepest declines.
One reason cannabis stocks have seen so much volatility is the new pool of retail investors. In the meme stock frenzy, some cannabis stocks have gained significant popularity with Reddit and Robinhood Markets, Inc. (NASDAQ:HOOD) investors. In most cases, these are predominately Canadian marijuana stocks because of their availability on the Nasdaq and NYSE. Robinhood investors have grown to an estimated 31 million users. This large retail pool helped the meme reach new highs this year.
Canadian Pot Stocks And US Marijuana Legalization
Canadian cannabis stocks could have a catalyst once the US incorporates federal cannabis legalization. Currently, Congress has a few different legislations circulating on Capitol Hill, but none are thought to have enough support yet in the Senate. As the support grows for marijuana in 2021 so do the chances that we may see a long-needed change in federal marijuana legislation.
For investors starting a position in marijuana stocks means investing in one of the fastest-growing global markets. It’s important to do your due diligence on a cannabis company before investing. Researching a company’s financials can give investors insight into the company’s health and future trajectory. Also studying how a pot stock performs in the market can help you establish the best entry point for your investments. Let’s take a look at 2 top marijuana stocks preferred by Reddit and Robinhood investors.
Top Canadian Marijuana Stocks To Watch On Robinhood
Canopy Growth Corporation
Canopy Growth is one of the largest producers and distributors of cannabis and cannabis-derived products in the Canadian market. Primarily, the company sells cannabis and hemp-derived products in Canada, the US, and Germany. Currently, the company has made a US distribution agreement with Southern Glazers Wine & Spirits for a CBD beverage portfolio. In the Canadian market, Canopy increased its brand portfolio with the acquisition of one of the countries premium cannabis brands The Supreme Cannabis Company, Inc.
On August 6th Canopy released its first-quarter fiscal 2022 financial results with 23% growth in Q1 2022 compared to Q1 2021. The company is reporting net revenue of $136 million in Q1 2022 driven by strong double-digit growth across Canada. Canopy reported total net cannabis revenue of $93 million in Q1 2022 an increase of 17% from the prior year. Specifically, other consumer products revenue was $43 million. Currently, net earnings in Q1 2022 are $390 million of which $518 million was driven by other income totaling $581 million during Q1 2022. The company saw an adjusted EBITDA loss in Q1 2022 of $64 million an improvement from Q1 2021.
CGC stock closed on August 11th at $18.88 down 20.98% year to date. The stock has a 52-week price range of $13.83-$56.50 and has dropped 62.68% in the last six months. According to analysts at Tip Ranks, CGC stock has a 12-month average price target of $26.30 per share. In essence, this would represent an increase of 39.08% from its last trading price of $18.88. For this reason, CGC stock could be a top Canadian cannabis stock for your watchlist in August.
Sundial Growers Inc.
In Canada, Sundial Growers Inc. engages in the production and marketing of cannabis products for the adult-use market. Currently, the company produces and distributes inhalable products, such as flowers, pre-rolls, and vapes. In the first quarter of 2021 Sundial delivered earnings of C$1.7 million compared to a loss of C$32.7 million sequentially. In addition, the company reported a first-quarter positive adjusted EBITDA of C$3.3 million compared to a loss of C$5.6 million sequentially.
At the present time, Sundial has two main segments they are achieving profits from cannabis operations and the other company investments. In detail, the company realized C$2.8 million in interest and fee revenue from long-term loans to third parties. Sundial has C$12.9 million in realized and unrealized gains from investments in securities. In the past few months Sundial has been gaining interest from Reddit and Robinhood investors. This month, the company is expected to release its second-quarter 2021 earnings on August 12th after the market closes.
SNDL stock closed at $0.8067 on August 11th up 72.12% year to date. The stock has a 52-week price range of $0.138-$3.96 and has declined by 72.37% in the last six months. According to analysts at CNN Business SNDL stock has a 12-month median price target of $0.70 per share. This would be a decline of 13.26% from its last trading price of $0.8067. As this top Canadian marijuana penny stock continues to consolidate it could be time to add it to your list in August.
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