Are These Trending Marijuana Stocks On Your November Watchlist?
In times like these, investors have been looking at marijuana stocks. The recent spike in marijuana sales is no surprise. This is because many looks towards the calming substance to deal with anxiety and stress at home. Even before the pandemic, the rising popularity of marijuana was making waves in the stock market. This is evident with companies like Canopy Growth Corp (CGC Stock Report) and Aurora Cannabis Inc. (ACB Stock Report) reaching record highs in sales in the last few years.
Undoubtedly, when the pandemic hit in early 2020, many investors were quick to sell their marijuana stocks. This is understandable as recreational needs become less important in times of crisis. However, it might benefit investors to take another look into the cannabis sector in November. This is because of the rise of liquidity. Right now, there are 10 cannabis companies in North America with billion-dollar market caps. More institutional investors are buying top cannabis stocks.
Furthermore, there is a projected increase in state-regulated marijuana sales in the U.S. from $12.4 billion in 2019 to $34 billion by 2025. Several states are also set to vote on legalizing recreational marijuana. This sets up an interesting socio-political landscape for marijuana stocks in the near future. With all that said, let’s take a look at the top marijuana stocks going into November.
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Top Marijuana Stocks To Buy [Or Avoid] In November 2020: Aphria
The first company on this list is Aphria Inc. (APHA Stock Report). Aphria is one of the largest Canadian cannabis companies and has been around since 2014. The company has reported consistent revenue over the last five quarters. The steady net revenue is partly a result of its dried cannabis flower distribution. The company’s distribution revenue increased by 12% to $99.1 million in its latest Q4 fiscal posting. Included in its portfolio is also a series of vape products under the brand name of Good Supply. The brand is currently the most popular in three major Canadian provinces, making up 29% of the market. All this has resulted in Aphria seeing a more than 100% rise in its revenue for fiscal 2020.
On the international front, Aphria appears to be focusing on expanding its operations overseas. The company’s international segment has begun to emphasize on operations in Latin America and Germany. CC Pharma, a subsidiary of Aphria is now importing and distributing the company’s product to 13,000 retail pharmacies in Germany. It appears the Aphria has not let the pandemic slow down its stride and is planning to ride this tailwind as far as possible.
In its latest earnings call, CEO Irwin Simon said, “We’re setting ourselves apart from the rest of the cannabis industry, generating some of the strongest sales growth, maintaining one of the strongest balance sheets and cash positions, compelling consumer brands, and a well-diversified global business.” With seemingly healthy financials, are APHA stocks worth paying attention to?
Top Marijuana Stocks To Buy [Or Avoid] In November 2020: Innovative Industrial Properties
Next on this list would be Innovative Industrial Properties (IIPR Stock Report). The company is a real estate investment trust (REIT). It specializes in the regulated U.S. cannabis industry. It is well known for purchasing industrial real estate assets to be leased accordingly. Innovative obtains its profits from leasing real estate and facilities to cannabis merchants. It does so by buying the property from small-time owners who are often in need of cash in this budding industry. As a REIT, 90% of its net income will go to shareholders as dividends. These dividends are fortified by rising earnings as the company’s profits rose by 143% year-over-year in its latest quarter.
In recent news, Innovative has reinforced its sale-leaseback agreement with Green Thumb Industries (GTBIF Stock Report). The company agreed to an additional $25 million in funding towards the construction of a cannabis growing facility in Ohio. This may help expand Innovative’s operation as Green Thumb is known as the best-in-class operator. Green Thumb CEO Ben Kovler also said “The Ohio regulated cannabis industry continues to represent a tremendous growth opportunity and we look forward to bringing our high-quality Rhythm flower to the patients in the state”.
The company expects a consistent 60% rise in earnings through the year to 2021. This in addition to the continual growth of the cannabis industry in the U.S could put IIPR on an upward path for the predictable future. Innovative appears to be kicking into full gear for Q4. With that in mind, would you consider adding IIPR stocks into your portfolio?
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Top Marijuana Stocks To Buy [Or Avoid] In November 2020: Tilray
The final spot on this list goes to Tilray (TLRY Stock Report). Tilray is a Canadian pharmaceutical and cannabis company that has been around since 2013. It is incorporated in the U.S. and is headquartered in Ontario. Tilray made history in 2018 as the first cannabis company to go public. Despite a promising start in a time where cannabis was gaining traction, the company has suffered. With the onset of COVID-19, the TLRY shares lost over 90% of its value.
However, things appear to be looking up for Tilray as its share price has doubled since the March lows, currently priced at $5.71 per share. As the U.S Presidential Elections are happening this week, it is an extremely polarizing race. With the possibility of such a massive shift in administration approaching, this is likely the explanation for Tilray’s increase in share value. It can be linked to a pledge made by the Biden-Harris presidential candidates to decriminalize marijuana in September 2020. Joe Biden’s running mate Kamala Harris reinforced the declaration during the vice-presidential debate on October 7. She said, “We will decriminalize marijuana, and we will expunge the records of those who have been convicted of marijuana,”. Tilray stock increased by 18.3% the following day.
This is undeniably good timing for Tilray which is currently looking to regain its former glory. CEO Brendan Kennedy reassured investors by explaining that the company strengthened its balance sheet during Q2 2020. He added that the closing of a $60 million debt facility and an $85.3 million net equity offering should provide the company with sufficient funds to focus on achieving profitability. Should investors get fired up for TLRY stocks despite the uncertainty of the election?