3 Pot Stocks That Can Return Sizzling Highs for Investors
Three Killer Weed Stocks with High Prospects
The high-flying marijuana segment is currently taking a breather after the impressive gains earlier in the year. There’s nothing to worry about though; it’s simply a market adjustment.
The reality is that the demand for marijuana, both recreational and medical, will continue to spike higher, especially as the U.S. jumps aboard.
The widely followed Horizons Marijuana Life Sciences Index ETF (OTCMKTS:HMLSF, TSE:HMMJ), a barometer of the leading marijuana stocks, retrenched 23% during the past three months, but is holding to a 13.6% gain this year.
Chart courtesy of StockCharts.com
Investing in the Horizons ETF helps reduce the risk from holding individual marijuana stocks, but for those of you who have the appetite for more risk, choosing specific stocks can often make more sense.
Here are three small-to-mid-cap marijuana stocks that I feel provide traders with good risk/reward opportunities.
OrganiGram Holdings Inc.
Canada-based OrganiGram Holdings Inc. (NASDAQ:OGI), with a market cap of $910.0 million, is trading well off from its 52-week high of $8.44 but is up 64% this year.
OGI stock trades on the Nasdaq, unlike many of the other marijuana stocks, which trade only in Canada or on the much more speculative over-the-counter market.
Chart courtesy of StockCharts.com
OrganiGram is federally approved in Canada to produce and sell premium-grade cannabis and extract-based products for medical and recreational use.
The company’s facilities are expected to have a production capacity of 113,000 kilograms (249,122 pounds) per year.
Harvest Health & Recreation Inc.
The Tempe, Arizona-based Harvest Health & Recreation Inc. (OTCMKTS:HRVSF, CNSX:HARV) is a pure play on the U.S. marijuana market. It has a market cap of $1.5 billion.
Trading at the $5.00 level, HRVSF stock is at half of its 52-week high, down a whopping 42% over the last three months.
Chart courtesy of StockCharts.com
Harvest Health is a vertically integrated marijuana play, meaning the company is involved in each step of the process, including research, cultivation, and sales. The company is currently operating 13 retail locations in five states and is planning to have 100 dispensaries in 14 states by 2020.
What’s really intriguing is that Harvest Health believes it can pay a production cost of less than $1.00 per gram.
Curaleaf Holdings Inc
Curaleaf Holdings Inc (OTCMKTS:CURLF, CNSX:CURA) is the largest of the three marijuana stocks discussed here. With a market cap of $3.4 billion, the stock is up 60% this year but down 26% over the last three months.
Chart courtesy of StockCharts.com
Also a pure play on the U.S. pot market, Curaleaf is probably the best bet of the three marijuana stocks simply because it has more scale.
The company’s current network is composed of 45 dispensaries, 12 cultivation sites, and 11 processing facilities spread across the United States.
Analyst Take
Pot stocks are here to stay. The sector will likely undergo some consolidation, but the growth will be staggering. So it makes sense to have some funds in play in the marijuana sector.
Rather than playing the really small cannabis companies, my list of three decent-sized marijuana stocks could return some massive gains in a few years.
