It’s been an up-and-down week for cannabis stocks in an up-and-down year for the market as a whole, as marijuana investors struggle to make of what to do with tumultuous world events. While changing laws and public sentiment seems to favor the cannabis industry, continued volatility in the market has left investors wary. It’s the reason why the large market growers — the so-called big-cap plays have been left holding the bag recently.
On the other hand, small to mid-sized companies have been experiencing a bit of a renaissance as of late, and there’s no doubt that there is a lot of value in this sector. But the question remains, do they have enough in the tank right now to make things worthwhile for investors? And with so much external turmoil going on in the world, between COVID-19, a tanking economy, and an upcoming presidential election, is it even the right time to invest?
Those questions will always remain prescient, but action is better than inaction, even if it means cashing out. This is why it’s time to look at a few of the more popular companies on the market today and ask, will these four pot stocks beat the market in 2020?
A large cannabis grower takes a hit
The first company on this list is HEXO Corp., a cannabis stock that’s been beaten down as of late. However, those fortunes look to be turning around, making them an exciting play for the rest of 2020.
Sure, the company is volatile, but its revenue has grown by a whopping 30 percent over the past year. That’s a feat in an industry that’s been looking at layoffs left and right. To put that number in perspective, HEXO Corp. made about CA$22 million in revenue over the past year, at a time when not that much was expected of them.
During their recent third quarter, the company has sold upwards of 10,000 kilograms of cannabis, and posted a gross margin of around 40 percent, according to the website MarijuanaStocks.com. That’s better than many of their competitors, giving them an upper hand heading into the second half of the year.
A major player splits
Back in May once-dominant Aurora Cannabis did a reverse split — they split 1 for 12 actually — something that’s usually difficult to recommend. However, in this case, the company put its money where their split was and saw its stock price soar 240 percent.
As the website Investor Place notes, Aurora’s stock still has a dedicated fanbase, and it probably always will. However, the company’s fundamentals seem to be holding steady — a lot stronger than they were back when the company was soaring a few years ago. For example, they’re three times more expensive than competitor Canopy Growth. According to experts, this stock has potential, as long as investors buy in at around $10.
Extractions are where it’s at
For the past year or so, experts have agreed that the extraction market has been the place for growth. Perhaps no company is more poised to take over this sector than MediPharm Labs Inc., as it’s one of the more popular companies in the industry. According to MarijuanaStocks.com, consumer demand for cannabis derivatives is up thanks to the COVID-19 pandemic, which has helped MediPharm’s stock grow at an astounding 93 percent.
Anyone looking for something close to a sure bet — after all, this is a sector that deals in edibles, tinctures, drinks, and more — should take a look at MediPharm for the latter half of 2021.