Is Aphria a Golden Marijuana Stock?
This year has not been kind to the marijuana stock market. Corrections have come in a huge way to many of the world’s leading pot stocks, with many marijuana stocks either remaining flat or losing value this year.
This stands in stark contrast to last year, when we saw massive gains pretty much across the marijuana industry. But like the old adage goes—buy low, sell high—this might, in fact, be the best time to get in on the marijuana stock market.
With that in mind, there’s one stock in particular that I think has the ability to be both a great investment at its currently lowered price and one of the best marijuana stocks 2018: Aphria Inc (TSE:APH).
After falling from its high point in April, the APH stock price is down nearly 30%. Normally, that would be cause for concern among investors, and many might panic in the face of such a large drop. But, in order to play the marijuana stock market correctly, you have to take a longer big-picture view.
First, consider that, unlike a great many other marijuana stocks, APH stock is actually up by nearly 20% since the beginning of 2017. By comparison, Canopy Growth Corp (TSE:WEED) is down three percent. So, Aphria stock is still going strong, even if it did experience a big hiccup recently.
Another reason I see the potential of APH stock is that I believe it is in the recovery stage after its April troubles. It has gained nearly eight percent in the past three months and it has seemed to level off, even if August was another weak showing for the stock.
But this type of give-and-take stock value is to be expected in a volatile marijuana market. Besides, we’re not looking for eight percent gains year-over-year when investing in the marijuana stock market; we want double-digit, even triple-digit (if you’re feeling particularly ambitious) gains. In that case, you have to be willing to take some bumps on the ride toward making those gains.
I believe that APH stock has a lot of qualities that will set it up to succeed.
Chart courtesy of StockCharts.com
Canadian Marijuana Legalization
One of the reasons I’m bullish on Aphria stock is that it operates in Canada, a country that we all know by now is planning to make recreational marijuana legal in 2018. This monumental legislation is the first of its kind in the developed world and would see a dramatic reshaping of the marijuana industry as a whole. After all, if Canada is the first domino to fall on the road to legalization, then marijuana stocks are only going to explode from here on in.
Since Aphria is a Canadian company, it can take advantage of the coming legalization and operate in a safeguarded territory while producing its marijuana. This is in contrast to the U.S., where several states have legalized marijuana production, but the drug and its harvesting still technically remain illegal, as far as the federal government is concerned.
So, should the Feds tomorrow decide to seize marijuana production facilities or tools, they could. In Canada, that won’t be a problem.
The leadership team at the helm of Aphria continues to make good decisions that could propel the company to future success.
Whether it’s in savvy deal-making—like partnering with Nuuvera Corp. to help expand its foothold into lucrative foreign markets like Germany—or in simply having competent people steering the ship, there’s a lot to like about the internal strength of Aphria.
And that counts for even more in the marijuana stock market, which is still struggling to shed the veneer of grimness that accompanies any formerly illegal substance that was once only peddled by criminals.