Are These The Best Cannabis Stocks To Invest In 2020?
As we entered the year 2020, things were looking up for pot stocks. The cannabis industry ended in 2019 on a low note, but investors remained hopeful. Although marijuana stocks had a good start in 2020, what we didn’t know was that the coronavirus could become this serious. As the virus continued to ravage the world, pot stocks were hammered along with the broader market. And because of that, many marijuana stocks had hit a low point. However, since March, there was light at the end of the tunnel for the cannabis industry. And pot stocks saw a fair share of rallies. Since then a large portion of marijuana stocks to watch has gone up quite a lot in value.
Shares of leading Canadian cannabis stocks popped in early trading Wednesday. The move followed a report by BBN Bloomberg that Aurora and Aphria (APHA Stock Report) had recently discussed a possible merger, but those talks evaporated into the air last week. Despite that, investors are still scooping up cannabis stocks this week anyway. Of course, there are no guarantees in the stock market, let alone the volatile cannabis industry. This means that prospective marijuana stock investors have to understand the risks before investing. These risks, however, can all be minimized with enough due diligence and understanding of the general marijuana industry.
With the internet at our fingertips, looking for the best pot stocks in 2020 couldn’t be any easier. Even though there seems to be renewed interest in the marijuana space, investors should note that we are living in an uncertain future where we are slowly adapting to the new normal. And the stock market is also increasingly unpredictable due to the pandemic. With all that in mind, are these marijuana stocks on your watchlist in 2020?
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Best Pot Stocks To Watch In 2020: Aurora Cannabis
Aurora Cannabis (ACB Stock Report) has been one of the riskier buys in the cannabis industry. But there’s hope that the company is turning things around. From the company’s third-quarter results, the company recorded $56 million of revenue, up from $41 million in the second quarter. There’s no doubt Covid-19 has been weighing down on the cannabis industry. But it seems there is a silver lining here. At least Aurora seems to be able to weather the Covid-19 storm.
A strong balance sheet is especially important in such troubling times. Companies that have the cash flow to buffer the downturn are most likely to overcome the hurdles from the pandemic. Aurora has been beefing up their cash balance and trying to burn less cash from its day to day operating activities. The company is doing what it can to improve their cash situation by shutting down five facilities in Canada and reducing production staff by 30%. For this reason, Aurora is optimistic that it could be profitable later this year. That said, could ACB stock be the best marijuana stocks to watch this year?
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Best Pot Stocks To Watch In 2020: Canopy Growth
Like most top marijuana stocks, Canopy Growth (CGC Stock Report) has performed very well since their March doldrums. Some investors might shy away from the cannabis industry altogether. I don’t blame them, though, since the valuations of the industry fail to match the bullish hype. But for some, the important catalyst for Canopy Growth stock is the underlying medicinal implications. Given the disruption to traditional medicinal supply chains, medical marijuana research has never been more important. With the potential of cannabis’ medicinal applications, should investors include CGC in their list of top marijuana stocks?
As Laura Gonzalez, Ph.D., associate Professor of Finance at California State University, Long Beach puts it:
Like with tobacco, investors expect that the processing of marijuana may eventually include elements that will prove to be a health hazard. This uncertainty risk will continue to affect firm valuations, especially in products offered to young customers that are likely to receive the most attention from researchers. However, the supervised regulated use of marijuana for health-care purposes has much greater valuation prospects. As societies change towards providing more options to critically and terminally ill patients, there will be wider greater trust in the firms that provide quality alternatives complying with regulations and medical recommendations.
