OrganiGram vs. CannTrust Stock: Two Reliable Marijuana Oil Stocks

 organigram vs canntrust stock
iStock.com/joannawnuk

OrganiGram vs. CannTrust Stock

One of the most exciting subsectors of the marijuana market is cannabis oil. The extract has become one of the most popular ways to indulge in the drug, with many preferring the oil to smoking or edibles.

Companies operating in the cannabis oil sector, therefore, are some of the more exciting ones in the market.

And that brings us to the question of OrganiGram vs. CannTrust stock. I’ll break down both the OrganiGram stock forecast and the CannTrust stock forecast and examine whether these are worthy picks.

Before we dive into the future of these two companies, let’s take a look at what makes the cannabis oil sector so appealing. Here’s how I described it earlier this year:

…in order to understand what is so enticing about the global CBD oil market—and therefore, cannabidiol stocks—you have to examine just how much potential there is for growth among this sub-sector of the industry.

According to recent CBD market analysis reported by Forbes, the market is forecasted to increase by 700% by 2020. Another study on CBD market growth, by Hemp Business Journal, estimates that the sector will reach $2.1 billion by 2020,  which would be an enormous rise from the $202.0 million in 2016.

The cannabis oil sector is growing rapidly. Companies that can take advantage of that burgeoning market may be able to avoid much of the logjam around traditional marijuana while reaping the benefits of massive growth.

OrganiGram Stock Forecast

Let’s first begin with Organigram Holdings Inc (OTCMKTS:OGRMF, CVE:OGI).

OrganiGram stock has been one of the best performers in the marijuana market this year, up 20% year-to-date, and for good reason.

OrganiGram enjoys one of the better price-to-earning (P/E) ratios in the marijuana industry, which is a massive advantage. Why? Because, with so many companies criticized for being overvalued, OrganiGram’s relatively rosy P/E ratio marks it as being one of the more undervalued stocks.

The P/E ratio, of course, is the calculation in which the current share price is measured relative to the earnings per share.

Chart courtesy of StockCharts.com

With so many investors in the marijuana market concerned about overvaluation, that positive P/E ratio soothes some of those concerns and draws in investors.

On top of that good news, OrganiGram stock benefits from its recent expansion into the German market, something I’ve long prized in marijuana companies. (Source: “Organigram Announces First International Expansion Investment,” Cision, May 8, 2018.)

So, where does that leave the OrganiGram stock forecast? I believe that this company has a lot of room to grow in the cannabis oil production business.

With marijuana sales expected to skyrocket when Canadian marijuana legalization hits (OrganiGram is based in New Brunswick, Canada), the future looks bright for the company.

I wouldn’t be surprised if OrganiGram ends up being one of the top earners by the end of 2018, up by over 50% during the year.

Here are some reasons why I’m quite bullish on OrganiGram: the company’s position in the cannabis oil subsector, its international expansion, and its strong P/E ratio.

CannTrust Stock Forecast

Now let’s take a look at another company operating in this space, CannTrust Holdings Inc (OTCMKTS:CNTTF, TSE:TRST).

The CannTrust stock forecast also benefits from its presence in the cannabis oil sector, as well as from the upcoming marijuana legalization in Canada.

In fact, I don’t see this as an OrganiGram vs. CannTrust stock fight necessarily. There is plenty of room in the cannabis oil market for both companies.

CannTrust stock has had a rough go of it so far in 2018, down by over 10% since the year began. But that isn’t too surprising, considering the state of the market right now.

After all, 2018 has not been kind to most marijuana stocks.

Chart courtesy of StockCharts.com

CannTrust has registered pretty stellar sales, and a good chunk of that was in the cannabis oil business. Of the nearly $6.1 million that the company netted in sales during the first quarter of this year, over half of that was the direct result of oil and extract sales.

CannTrust is always gearing up for capacity expansion, with a greenhouse facility expansion underway. When completed, it should span about one million square feet.

While I’m not as high on CannTrust as I am on OrganiGram, I see potential in the CannTrust stock forecast.

OrganiGram and CannTrust Business Models

Both companies are trying to target a market that isn’t quite as saturated as many other sectors in the exploding marijuana business.

While the OrganiGram vs. CannTrust stock fight could come to fruition if these two companies end up among the top cannabis oil producers, ultimately both companies are trying to find a way to capitalize on the marijuana business while avoiding some of the more intense competition for marijuana cultivation and sales.

Another benefit of working in the cannabis oil business is that extracts and oils have higher profit margins compared to traditional marijuana products.

Analyst Take

In the OrganiGram vs. CannTrust stock debate, I would consider OrganiGram stock first, but I’m also impressed by the CannTrust stock forecast.

Both companies are operating in a very lucrative market, with much room to expand.

While my OrganiGram stock forecast has the company coming out of 2018 with double-digit gains, CannTrust is a little bit more of an unknown commodity, but I still view it as a solid stock, due to its presence in a very exciting market.