Check out the Best Cannabis Stocks!
As the cannabis market grows, it only makes sense for investors across the country to start looking into purchasing stocks and investing in companies that are expected to do well. The problem is that the average person has no idea who is predicted to do well, or how to even find this information. Lucky for you, we’re here to help.
Below, you will see cannabis stocks that are predicted by Cantor Fitzgerald to generate a total return of more than 15% over 12 months, meaning you are highly likely to make money on them. There is never a guarantee with this, but the prospects for these companies are higher than any of their competitors, according to stock market experts.
Before you decide to invest in any company, you will need to consider certain things. Your top consideration should be any legal risks, including possession and sale of marijuana and paraphernalia in certain states. Financial constraints may also play a large role, based on restrictions on banks for cannabis businesses on a state or federal level. As with any consumer-based business, supply and demand risks may create irregularities due to laws, and overproduction due to decreased demand causing severe losses.
You will definitely need to consider profitability risk when investing in up-and-coming businesses as growing companies raise money by selling more shares, which dilutes current shares. Pay attention to their current debt versus the profit margin so you can ensure they are actually making a profit, not just paying off start-up costs with no return. Finally, consider the OTC Risks. Many cannabis stocks trade in over-the-counter, or OTC, markets, which means they are not required to file regular financial statements or maintain minimum levels of market capitalizations. This means the financials of OTC stocks can be opaque, and they may have low liquidity making them difficult to trade.
With all this in mind, here are some of the best companies we’ve found with the highest expected yields in the coming year:
Aurora Cannabis (ACB)
Aurora Cannabis is a Canadian LP with the top share of the Canadian medical marijuana market, currently. Management within the company has said they should finally be profitable on an earnings before interest, taxes, depreciation and amortization, also known as EBITDA, basis as it exits the December quarter.
Organigram is another Canadian LP and is the parent company of cannabis-infused edibles company Edibles & Infusions Corporation. Experts have noted that Organigram is the only large Canadian LP that is still consistently gaining recreational market share, and the stock “represents good value” based on Organigram’s market share and improving profit trends. Additionally, the financial backing of minority investor British American Tobacco, or BTI, gives Organigram the flexibility to navigate a difficult pricing environment.
Village Farms (VFF)
Village Farms is a unique play on Canadian cannabis because the company’s produce division, which grows vegetables in Canada, Texas, and Mexico, accounts for more than half its revenue. Village Farms also owns U.S. cannabidiol brand Balanced Health Botanicals, meaning they have multiple profit streams and good promise for future growth.
Cresco Labs (CRLBF)
Cresco Labs is a U.S. cannabis MSO that is the largest U.S. wholesaler of branded cannabis. Cresco recently opened three new Florida dispensaries and now has a network of 19 locations in Florida and 53 total locations nationwide. Over the past year, the company gained market share in each of its markets outside of California. Experts say the stock has “optionality from several states in the east” that may soon vote to legalize recreational cannabis.
Green Thumb Industries (GTBIF)
Green Thumb Industries is another U.S. cannabis MSO. With 17 manufacturing facilities and 77 retail locations across 15 U.S. markets, Green Thumb has several potential long-term growth catalysts ahead, including a New Jersey sales ramp and recreational legalization in Rhode Island, Connecticut, Virginia and New York.