Marijuana Stocks on the Rise
The hype around marijuana stocks is building some serious momentum. The potential for pot to become one of the next big products traded on the open market is clear and present.
As the politics catch up to the market, we’re likely to witness an explosion in stock prices focused on the green herb. Nowhere is this more apparent than in the Great White North. Canadian marijuana companies and Canadian marijuana stocks are poised to see stratospheric rises as many expect that the question “When will Canada legalize marijuana?” will be answered sooner, rather than later.
The recent growth of the best marijuana stocks in Canada is being spurred on by the current federal Liberal government of Justin Trudeau and his promise to legalize the drug. While some analysts were concerned that the Liberal government may go back on its word—after all, several other platform promises from the election have been scaled back or dropped altogether—the recent news points in the direction of the Canadian government’s intent on legalizing marijuana.
When Will Canada Legalize Marijuana?
The Canadian government has even gone so far as to reportedly put a date on when it plans to fully legalize the drug: July 1, 2018. (Source: “Liberals to announce marijuana will be legal by July 1, 2018,” CBC, March 26, 2017.)
If that date holds, the best marijuana stocks in Canada may also soon become the best marijuana stocks in the world. After all, it would be the first Western country to fully legalize the drug for recreational use. While the Netherlands has a policy of non-enforcement that has effectively legalized the drug, Canada would be the first modern nation to put it on the books that pot is good-to-go for those wishing to indulge.
This marks Canada as an important country for the pot business, for a number of reasons.
First is Canada’s role as a guinea pig. Canada will be the first in the breach, so to speak, to see the ultimate impact of legalized recreational marijuana. Both the social and economic results of such a move will be watched keenly by countries that are in similar situations.
If the Canadian project works out and yields beneficial results, other countries will take note and even use it as an example of how to get marijuana legalized in a safe and profitable way for all those involved.
Safe to say, Canada would be thrust into the spotlight when (if) the marijuana legalization laws are eventually passed and put in force.
But the most important knock-on effect, at least for investors, will be the subsequent jump in marijuana stocks, followed by more stable numbers that would result after the initial jump tapers off.
Looking at the current status of the best marijuana stocks in Canada, they are already making strong progress, due to medical marijuana sales, alternative streams of revenue, and hype. With legalization on the books, however, we would witness firsthand the full potential of these shares.
As such, finding the Canadian marijuana stocks to invest in now is crucial to any investor looking to make a big play in the weed market.
While the United States lags behind on marijuana laws—as the administration of Donald Trump seems more likely to be an enemy than an ally and, at best, a non-factor—the Canadian government leading the charge on the legalization of marijuana is huge for the industry.
After all, more countries need to begin to push through favorable legislation if the drug wants to go mainstream.
And, while many nations are, in fact, looking into the codification of legal marijuana usage, none are particularly close, compared to Canada.
With all that in mind, what you have is essentially the pioneering nation when it comes to weed laws. Therefore, Canada is one of the best places to find great investment opportunities in this sector.
Canadian marijuana companies are set to see huge gains if everything remains on track, which makes the best marijuana stocks in Canada so enticing in the current political climate.
Canadian Marijuana Stocks to Invest Now
Chart courtesy of StockCharts.com
1. Organigram Holdings Inc (CVE:OGI)
As a marijuana penny stock, there’s more of a risk-reward structure to Organigram Holdings Inc (CVE:OGI), but recent news has pushed it more on the risk side of things.
That the company is smaller has allowed it to show massive gains and expansion, with an expansion of over 231% in share value over the past 12 months.
A class-action lawsuit filed against the company in 2017, however, stifled that growth. Stock has since come down 12%.
The lawsuit stems from the alleged use of non-approved pesticides in the production of Organigram’s marijuana. (Source: “Organigram Responds to Proposed Class-Action Suit,” MarketWired, March 7, 2017.)
The company posted its highest single-week sales earlier in March, pointing toward an improving consumer base and strong long-term outlook. (Source: “Organigram Posts Highest Single-Week Sales,” MarketWired, March 14, 2017.)
“We believe we are regaining the trust of our clients and the sales record is indicative of the faith they have in our new protocols and in the quality of the new products,” said Ray Gracewood, Organigram’s Chief Commercial Officer, in a statement.
“The positive response we’ve received from these clients, both in their feedback to us, as well as in their willingness to purchase new product, has been gratifying.” (Source: Ibid.)
The use of the pesticides resulted in the company’s products being recalled, but the all-time high sales show that it was hardly enough to bury the company. If you’re on the lookout for a marijuana penny stock poised for a bounce back, you can do worse than OGI stock.
2. Canopy Growth Corp (CVE:WEED)
Besides having probably the best ticker in the weed industry, Canopy Growth Corp (CVE:WEED) has a great many factors that make WEED stock one of the top marijuana stocks in 2017.
Canopy Growth has a dominant stake in the market, with a $1.48-billion market cap, enough to blow many of its competitors away. Canopy Growth stock has jumped 12.8% in 2017 and has seen an explosive 12-month run, with a 222% price increase.
The shares have certainly slowed down some since the stock’s meteoric rise in October 2016, but that doesn’t mean there’s nowhere left for the company to grow. With a commanding position in the market and being poised to be one of the first companies to take advantage of mass legalization in developed nations, there’s plenty of reason to believe that Canopy Growth can be the weed stock to own.
Canopy Growth is the premier Canadian marijuana stock, and is still quite cheap, just barely in the double digits. The company has a huge market share and a strong chance to make 2017 another great year of gains, with the 2018 legalization in Canada pushing the stock up even further.
3. Aurora Cannabis Inc (CVE:ACB)
Aurora Cannabis Inc (CVE:ACB) is a classic great penny stock: massive returns for a relatively low barrier to entry.
Being based in Canada will help the company grow as the legalization process continues apace.
2017 has been good for ACB stock, with gains of 10%, and that’s despite earlier trepidation due to the Canadian government potentially backing out of its legalization plan. Those concerns have since been quelled, and we’ve seen gains in the industry as a whole. But the number that’s truly exciting is 4500%; that’s how much ACB stock grew in the past 12 months.
4. Aphria Inc (CVE:APH)
While not as impressive as Aurora, with its massive share price rise, Aphria Inc (CVE:APH) stock has experienced strong returns of its own, gaining 421% over the past 12 months. Similar to Aurora, APH stock is one of the lower-priced marijuana stocks and, therefore, more aptly fits the bill of the best marijuana penny stocks of 2017, compared to a more household-name company like, say, Canopy Growth.
It too comes in on the lower end in terms of price per share, but that’s the situation for most of the Canadian marijuana companies. These companies’ share prices are doubtful to rise too high before all the dust settles on the laws and, therefore, this could make it the perfect time to invest and get in on the ground floor of what will be a weed boom when the laws are passed.
Of course, delays, or perhaps a reversal of position—however unlikely—by Canada’s Liberal government could punish these stocks.
Best Marijuana Stocks in Canada
While Canadian marijuana stocks linger in political limbo until the new laws are on the books, most of the shifts in stock prices will likely result from any new information that is released concerning the political process.
For marijuana investors looking to get in early on these companies, the key is to watch the political process both in Canada and abroad. With each new stride these countries make toward legalization, or at the very least deregulation, expect the stock prices to jump.