Best Retail Pot Stocks Before October 17
We’re about to enter one of the most exciting periods of marijuana history. The Canada marijuana legalization date approaches, and with it will come the first true test of cannabis retail sales’ potential. With that in mind, what are the best retail pot stocks before the October 17 legalization?
In order to answer that question, let’s first define what makes a company one of the best retail pot stocks before October 17.
One of the most important factors is a company’s marijuana supply capacity. By that, I mean how much pot it can produce.
This is a key metric in determining one of the better Canada legalization stocks because it determines which companies will be in the right position to sell pot in order to meet the marijuana market demand that is already projected to be extremely high come October 17.
We’ve seen many companies in 2018 aim to boost their capacity in order to meet this marijuana market demand. It acts as one of the key factors in my best retail pot stocks companies list.
Another very important thing to consider is a company’s signed supply agreements in Canada.
This is a bit of a no-brainer. After all, you could produce a ball of marijuana the size of the sun, but it will do you no good if you can’t sell it.
While some provinces in Canada will allow companies to operate private retail storefronts, being a wholesale provider to provinces is a surefire way to earn oodles of cash while the private retail business gets off the ground.
As such, the best retail pot stocks before the October 17 legalization are those that have concrete supply deals in place.
The final aspect that investors need to be aware of before choosing a marijuana stock as cannabis retail sales open up in Canada is that there’s more to the pot trade than just Canada.
While Canada is exciting as the first modern country to legalize pot, it’s important to remember that the Great White North is actually a relatively small market.
The true potential of the marijuana industry lies in the global reach of the product. Remember that many governments will be watching to see how legalization pans out in Canada and then reacting accordingly.
This could be the first hole in the dam that brings about an onrush of marijuana legalization across the globe. As such, companies that already have footholds in international markets are way ahead of the game.
Best Retail Pot Stocks Companies List
Armed with the information above, I’ve compiled my list for the best retail pot stocks before the October 17 legalization. Their recent stock performance is shown on the stock chart below.
- Canopy Growth Corp (NYSE:CGC)—black line
- Cronos Group Inc (NASDAQ:CRON)—red line
- Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB)—blue line
Chart courtesy of StockCharts.com
Canopy Growth Stock
One of my favorite companies in the industry, Canopy Growth stock is poised to see massive gains come Canada marijuana legalization and beyond.
First, the company has a massive marijuana supply capacity that is only growing.
According to its most recent quarterly report, Canopy harvested close to 10,000 kilograms of marijuana and has approximately 19,721 kilograms of dry cannabis, 14,895 litres of cannabis oils, and 1,055 kilograms of softgel capsules in its inventory. (Source: “Canopy Growth Corporation Reports First Quarter Fiscal 2019 Financial Results,” Cision, August 14, 2018.)
And what is it going to do with all that marijuana? Sell it to the multiple provinces it has signed supply agreements with.
In fact, the company has signed a series of multi-year deals that will see annualized delivery requirements of over 67,000 kilograms, or about 36% of its total supply.
The remainder, of course, will look to be peddled through privately owned stores.
And finally, the company is poised to be a true global player in marijuana, having made forays into the German market and several South American markets this year alone.
Cronos Group Stock
Another company that checks all the right boxes in the lead-up to Canada marijuana legalization is Cronos Group.
Cronos reported its finished goods inventory and biological assets as having increased by 46% quarter-over-quarter to 2,451 kilograms as the company focuses on building inventory for the adult-use market. (Source: “Cronos Group Inc. Announces Second Quarter 2018 Results,” Cronos Group Inc, August 14, 2018.)
On top of that good news, Cronos Group stock was benefited by an announcement that the company had secured listings and signed binding supply agreements with the Ontario Cannabis Retail Corporation and the BC Liquor Distribution Board. This was in addition to other deals signed with Canadian provinces. (Source: “Cronos Group Inc. Announces Provincial Supply Agreements,” Cision, August 21, 2018.)
And aside from the wins in Canada, Cronos Group stock has similarly been looking to expand internationally with plays in Australia, among others.
Aurora Cannabis Stock
The final company on our list, Aurora Cannabis stock, also has a ton of potential as we near Canada marijuana legalization.
Aurora Cannabis has been on an acquisition spree in 2018, gobbling up smaller marijuana companies. This eventually culminated in the blockbuster acquisition of MedReleaf Corp.
While this hasn’t necessarily translated into success on the stock market in 2018 so far, Aurora Cannabis stock deserves a second look due to its high marijuana supply capacity. It is likely one of the few companies that can rival Canopy from a pure numbers standpoint.
Aurora has also signed a number of supply deals within Canada, with the latest one coming out of the Holy Grail of Canada markets, Ontario.
Finally, the company also has an international perspective, expanding into many existing markets like Denmark and several other European markets.
The approaching Canada marijuana legalization date has many investors deeply excited over the future of the marijuana industry.
Canada represents what is likely the first step in a long line of countries adopting a sensible pot policy, which will hugely benefit marijuana stocks.
As such, finding the best retail pot stocks before October 17 legalization is crucial as it allows investors to get in on the ground floor, so to speak, before the true potential of the industry is reached.
The list above represents three companies that are not only poised to win big in the Canadian market, but have the ability to remain strong long after the hype surrounding Canada has died down and new bigger markets begin to open up to pot.