Late last year, as cannabis stock values soared, investors giddily wondered when the apex would hit. But, a series of setbacks in the early part of 2018, from U.S. Attorney General Jeff Sessions’ pullback of the “Cole memo,” to Canada’s legalization pushback sent pot stocks into a dizzying tumble. Weak-kneed investors, many still stricken with trauma from their Bitcoin investments worried if the industry was, as some experts predicted, more speculative than standard.
An overcrowded market with low-barriers to entry may leave some marijuana stock investors wondering just who is looking to pump up their prices with a few good headlines while looking for a wealthy suitor, and who is in it for the long term. These are the best four marijuana stocks for long-term growth:
Late last year Aphria Inc.’s (NASDAQOTH:APHQF) (TSX:APH) supply deal with Canadian pharmacy retail giant Shoppers Drug Mart sent stock prices soaring and pushed the company’s market cap north of $2 billion. At the time many analysts called the deal "a watershed moment for the industry."
The deal sees Aphria supplying the chain with dried bud and oils for sale via the store’s online portal. Moreover, according to The Motley Fool, Canada’s third-largest marijuana stock is now ready to become one of its largest cannabis producers thanks to a $100 million investment in a four-phase project set to finish at the end of 2019. With 1 million square feet of growing capacity, Aphria will be able to produce upwards of 100,000 kilograms of cannabis per annum.
Matching their rivals such as Aurora Cannabis (TSX:ACB), Aphria recently spent $670 million to acquire Nuuvera Inc. (CVE:NUU), a deal which will allow them to expand into international markets. In mid-February, the company signed a deal with the Société des alcools du Québec to supply cannabis to their adult-use market.
With a management team focused on profitability, Aphria is a golden pot stock play for long-term weed investors. Even with their recent move to divest from their U.S. interests to appease the TSX, the company has diverse holdings, and a foothold in the international market to keep shareholders happy for years to come.
Cannabis Wheaton Corporation
In early March Cannabis Wheaton Income Corp. (CBW.V) (NASDAQOTH:CBWTF) announced a definitive agreement to provide Sundial Growers Inc. with $7million in non-dilutive debt financing which the company will use towards the construction of a new 545,000 square foot state of the art cultivation facility in Olds, Alberta. As a non-traditional grower, one that provides capital to other growers in the market, Wheaton pays a below-market rate for its product, which it turns around and sells for a hefty profit.
According to some experts, Wheaton sees a return rate of 60 percent or better on most of its investments. With upwards of fifteen deals similar to the Sundial agreement, Wheaton is a diversified pot stock that investors can take to the bank. Their holdings are varied both geographically throughout Canada, and numerically, ranging in a variety of different sizes.
Earlier this year, Wheaton announced a deal with Colombian federally licensed “Cannabis Operator” Inverell S.A., giving the company a strong foothold in the international market. According to a statement, the company will purchase 80 percent of all common shares of Invernell on a fully diluted basis.
The Wheaton weed model puts much stock in their partners and forces the company to front a ton of capital. However, as a long-term pot stock play, Wheaton is a strong bet for cannabis investors looking to grow their market share.
Also On The Radar
Emerald Health Therapeutics, Inc. (EMH.V) (NASDAQOTH:EMHTF) is a little-known marijuana stock that could have a massive upside once legalization finally comes to Canada later this year. According to The Motley Fool, the company may have well near 5.8 million square feet of growing capacity by the end of the year. The bulk of that comes from a 50-50 partnership with Village Farms International (NASDAQOTH:VFFIF), who the company is working with to retrofit 1.1 million square feet of former tomato growing space. Investors in the weed space should keep a close eye on this growing pot stock.
Cara Therapeutics Inc. (NASDAQ:CARA), is a pharmaceutical play in the marijuana stock market which currently has no cannabis drugs on the market. Their drug, CR845 was recommended a few years back by an independent data monitoring committee for postoperative pain and has shown positive results regarding treating chronic kidney disease-associated pruritus in clinical studies, according to The Motley Fool. Some recent setbacks have turned pot stock investors away recently, but if the company can find success, then Cara could be a long-term play cannabis investors should watch.
*Editor’s Note: The author of this article has no position in any of the stocks mentioned nor in any competitor stocks.The opinions expressed are solely his own and do not necessarily represent the views of PotNetwork.