Your full information to investing in hashish shares in 2020
Think back to 2017, 2018, and even the first quarter of 2019 – cannabis stocks were hot and talk from Wall Street investors worldwide.
Those who had the resources and foresight to invest in cannabis a few years ago were doing pretty well early last year. More than a dozen cannabis stocks rose 70% or more in the first quarter of 2019, giving investors four-digit gains. But the victories were short-lived.
Cannabis stocks have dropped in the past 14 months, and recent events have done nothing but throw another wrench into the gear for already pessimistic investors.
However, there is a silver lining; the fact that cannabis is always a sought-after product, so certain stocks still have great potential.
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What do the experts say?
Matthew Carr, financial publisher and chief trend strategist at The Oxford Club, a network of investors and entrepreneurs, believes cannabis stocks are sure to see better days, and these days are likely to come. He says it is now time to invest in the cannabis industry.
"The industry was killed by the vaping crisis (last year)," said Carr. “Coming from the illegal market and the vitamin E additive, this contributed to the longest bear market in the industry. Then we had wrongdoing and layoffs of the CEO. After we did that, I thought 2020 would be a good year for cannabis. "
"After COVID met, I thought it might be the last straw to hit the camel's back," he continued. “However, the industry has proven to be remarkably resilient. Cannabis deserves a place in this vice-stock category – alcohol, tobacco, firearms, casinos – all of which people consume more during an economic recession. I think the sector is attractive now and after the end of the pandemic. "
Stifel analyst Andrew Carter repeated these assessments and referred to the Canadian market. "From late April to May, the market made progress with stores (reopening), new store expansions, private operators investing in omnichannel capabilities, and provinces improving their own e-commerce capabilities. We believe the strength is likely to continue . "
Things to consider
First of all, it is extremely important to remember that topfacts do not get rich overnight, it is not such an investment. Yes, in the beginning the stocks rose to unprecedented heights. But this bubble has burst and the prices are balanced. From this point on, you can expect the growth of stocks that have what it takes to get over the current hump to slow down and still remain constant (over years, not weeks or months).
Cannabis legislation is advancing in the United States – revenues continue to rise – what else does the future hold?
The second thing to keep in mind is that numbers and profitability are important over marketing hype and empty promises. That may sound obvious, but a good advertising campaign by a well-known company could have some inexperienced investors missing important red flags.
For example, Aurora Cannabis is a well-known Canadian breeder and a top stock among millennial investors. Unfortunately, the company has lost money on how to do it, and the stock price goes down as a result. Aurora stocks have lost 84% of their value in the past year, but newbies are still quick to throw money on the troubled stocks.
In comparison, investors with money in the lesser known Trulieve Cannabis share have been banking for years. Though operating in multiple states, Trulieve has largely focused its efforts on the Florida market, with 48 of its 50 medical pharmacies operating within the state. Their targeted marketing strategy has helped them to design the branding very effectively and at the same time keep the company costs low.
The third must is that cannabis is a fluctuating stock in a relatively new and turbulent market. As with most other stocks, many social factors affect the cost and profitability of your investment. Tourism, unemployment rates, the job market and many other issues can affect a cannabis company's success.
Trulieve Cannabis (OTC: TCNN.F) – As mentioned above, this stock was a steady money-maker. Last quarter, Trulieve had total sales of $ 96.1 million, with cost of goods sold $ 28.9 million and operating expenses of $ 31.1 million, resulting in an operating income of more than $ 36 million scored. Trulieve's shares rose 12% last year.
Marlboro Investment illuminates the assets of the Canadian Cronos Group
Cronos Group (CRON: NASDAQ) – With financial support from major investors such as Altria, a manufacturer of Marlboro cigarettes, the Cronos Group has been able to return money to its core businesses, strengthening its impact and reputation in the global cannabis market. In the first quarter of 2020, Cronos saw sales grow 55.5% year over year to $ 8.4 million in Canada. Despite the high operating costs, it is still a strong and safe investment in the cannabis industry.
OrganiGram (OGI: NASDAQ) – Although this company has had some ups and downs, especially now that we continue to control the economic impact of COVID-19, this Canadian producer and producer ended the last quarter with $ 41.2 in cash and short-term investments . This was an increase of around $ 8 million compared to the previous quarter. In the long term, this company has demonstrated good management practices and the ability to properly monitor funds.
To sum it up, if you have extra money available, it may be a wise decision to put your money in a safe and reliable cannabis stock. Prices are currently down and you can test the water without making a very large initial investment.
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