Are These The Best Cannabis Stocks To Buy Right Now?
For the past few months, cannabis stocks have been in the limelight. The cannabis industry as a whole has been riding high since Joe Biden won the presidential election back in November. This is because of Biden’s plans to decriminalize the calming substance. With federal legalization up for discussion, the marijuana industry could be looking at a massive market expansion in the U.S. Accordingly, this has added fuel to investors’ excitement over the top cannabis stocks. So much so, that even a Reddit-fueled trading frenzy was not enough to deter them.
For example, Canopy Growth Corp (NASDAQ: CGC) is now looking at gains of over 100% since November. Even pick and shovel plays such as cannabis farm supplies company GrowGeneration (NASDAQ: GRWG) are seeing growth. To point out, GRWG stock is up by about 50% year-to-date. According to Grand View Research, the global legal marijuana market could grow to $73.6 billion by 2027. This represents a compound annual growth rate of 18.1% in the next seven years. The report cites increasing efforts to legalize medical cannabis around the globe as another key factor for this growth. With this much activity across the board, I can understand if you would be keen on investing in the best cannabis stocks. If you are, here are top cannabis stocks making moves now.
Top Cannabis Stocks To Watch This Week
- Aphria Inc. (NASDAQ: APHA)
- Hexo Corporation (NYSE: HEXO)
- Aurora Cannabis Inc. (NYSE: ACB)
- Cronos Group Inc. (NASDAQ: CRON)
First off we will be looking at cannabis giant, Aphria. For the uninitiated, it is a global producer and distributor of cannabis products. The company boasts an impressive and diverse portfolio that includes medicinal and recreational offerings for users of all kinds. If all this wasn’t enough, the company is also in talks to merge with industry peer Tilray (NASDAQ: TLRY). This would set it to be a part of the largest cannabis company globally in terms of revenue.
Of course, Aphria is a company that investors have been watching for a while now. We can see this as APHA stock has skyrocketed by over 360% in the past year. In fact, it jumped by over 28% during intraday trading yesterday thanks to a rosy analyst update.
Specifically, Cantor Fitzgerald analyst Pablo Zuanic raised his price target for the stock to $25.62. On top of that, he also reiterated his overweight rating, given its current leading position in the industry, I can see why. In the meantime, Aphria has also been busy on the international front. Particularly, it bolstered its leadership position in Germany earlier this month. On February 8, the company announced that Chief Strategy Officer Denis Faltischek would also be assuming the role of Managing Director of Aphria Germany. It seems that Aphria is setting up for a busy year ahead on all fronts. Will you be adding APHA stock to your watchlist because of this?
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Following that, we have leading consumer packaged goods cannabis company, Hexo. To begin with, the company works with Fortune 500 companies through its hub and spoke business strategy. This allows Hexo to bring its wide array of cannabis offerings to established companies, leveraging their distribution capabilities. With such impressive operations, it is no wonder that investors have been flocking to HEXO stock as well.
The stock has surged by over 520% since the March lows. More importantly, HEXO stock popped by over 22% yesterday as news of its latest acquisition was announced. However, the stock has taken a breather this morning, falling 6.58% as of 3:30 p.m. ET.
Diving right into it, the company will be acquiring fellow cannabis cultivator Zenabis Global in an all-share transaction. The value of which is approximately $235 million. In summary, there are three key reasons as to why this is a fantastic play by Hexo. Firstly, the company would be strengthening its domestic brands and make it amongst the top three producers in Canada by recreational cannabis sales. Second, the deal would expand its foothold in Europe through Zenabis’ medical cannabis facility in the E.U. Third, Hexo would be boosting its annual cultivation capacity by over 111,000 kg after accounting for Zenabis’ growing facilities. Would you say this makes HEXO stock worth watching right now?
Aurora Cannabis Inc.
Aurora is another big player in the industry that most investors would be familiar with. That’s considering it has production facilities and sales agreements throughout the globe. Notably, ACB stock is in focus right now as British Columbia Investment Management (BCIM) significantly expanded its stake in the company. According to an SEC filing, the large Canadian pension fund ended 2020 with over 290,000 shares. This is a massive leap from its over 58,000 shares it held three months prior. For one thing, this could explain the 12.8% bump in ACB stock yesterday.
More recently, Aurora has been hard at work as well. Throughout January, it made two strategic agreements. The first of which involves Canada’s first national cannabis sales broker, Great North Distributions Inc. As a result, Great North is now the exclusive representative for Aurora’s brands in Canada, bolstering its market position in the region.
Furthermore, the company also signed a five-year exclusive supply agreement with MedReleaf in Australia. With Aurora expanding its market reach on the local and international ends, could ACB stock return to its former glory? That remains to be seen.
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Cronos Group Inc.
Global cannabinoid company Cronos is up next on our list. The company has research, production, and distribution facilities across five continents. It is also another go-to for investors looking to jump on emerging cannabis trends. Crucially, one thing that sets Cronos apart from the competition is its financial backing. The company has the support of tobacco juggernaut Altria (NYSE: MO). Because of this, investors could consider CRON stock to be among the safer investments in the industry. In fact, CRON stock is currently up by over 60% year-to-date.
Despite its diverse offerings, Cronos continues to expand its cannabis portfolio to cater to more users. According to Bloomberg, executive chairman Mike Gorenstein mentioned earlier this month that the company would be marketing lab-grown cannabis products. Subsequently, Gorenstein clarifies that these products would be the first of their kind for the industry. It seems that Cronos is making the most of its $122 million partnership with biotech company Ginkgo Bioworks back in 2018. Could cultured cannabinoids really make that much of a difference?
Well, should things go as planned, Cronos would be able to significantly reduce production costs. In turn, this would help increase profit margins which are undeniably good for the company and investors alike. Given all of this, do you think CRON stock is worth watching ahead of its fourth-quarter fiscal next week?