How These Marijuana Stocks Perform Against Other Market Players
The cannabis industry has been witnessing strong growth since the coronavirus pandemic. News about marijuana stocks and top pot stocks to watch are fighting to gain investors’ attention. As we are closing out the first half of the year, many top marijuana stocks have resurfaced. This came after a months-long bloodbath in the cannabis industry. Despite some days of losses, we have mostly seen gains amongst the popular pot stocks to watch.
Cannabis companies may be enticing ideas for investors worried about the current market. During this trying time, many people are turning into cannabis to deal with anxiety resulting from the global economic depression. This is especially evident when the national stay-at-home measures were implemented during March. Many turn to weed to get through the lockdown.
Are Pot Stocks Really Coronavirus Proof?
Many industries are tumbling, with many companies facing the prospect of bankruptcy. In most places, the cannabis industry was deemed as essential service despite widespread lockdown. Which is why we are seeing increasing sales reported by many marijuana companies. As there are loads of pot stocks in the market, not all of them are going to survive in 2020. Some of them might run out of cash before the pandemic ends.
This could be a good time for the cannabis industry to push the restart button. Whereby only the strong ones will continue operating. Many analysts believe that the second half of 2020 is going to be the time when the cannabis industry will turn over a new leaf. For that reason, let’s look at the two leading marijuana stocks to see if they are worth adding to your portfolio.
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Top Pot Stocks To Buy [Or Sell]: Tilray
Tilray (TLRY Stock Report) was one of the top pot stocks to invest in. Today, it is not that clear where it stands among its industry peers. That’s because TLRY stock saw its valuation drop by nearly half this year. A big concern for many marijuana stocks investors is whether these companies can weather through the coronavirus pandemic. It all boils down to one thing. That is whether these marijuana companies have enough cash to get through this challenging period.
During the first quarter of 2020, Tilray recognized $52.1 million in revenue, a rise of 126% year over year. Although the growth seems spectacular, the company is not yet profitable and is far from profitable. The net loss recorded for the period was $184 million. That was largely due to non-cash adjustments to the fair value of its warrants. However, the company is also taking active steps to reduce its net loss. The pot company expects to save around $40 million from corporate restructuring. Furthermore, the company’s international business seems to be gaining momentum. That could prove to be rewarding if the momentum is sustainable.
Investors who are bullish on TLRY stock might want to know it is challenging to raise funds during the coronavirus pandemic. Shall there be liquidity issues soon in the future, TLRY stocks could take another hit. On the other hand, it is possible Tilray can manage to reduce their cash burn rate and simultaneously achieve consistent respectable revenue. And if that happens, can we see a renewed interest in TLRY stock?
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Top Pot Stocks To Buy [Or Sell]: Canopy Growth Corporation
Canopy Growth Corp. (CGC Stock Report), one of the world’s largest marijuana stocks by market cap, is down 14.65% year to date. The mega marijuana company recently announced its earnings report for the fourth quarter of the fiscal year 2020. The company’s fiscal report was underwhelming, to say the least.
However, no matter how depressed the general industry is, cannabis isn’t going away. And when momentum returns, Canopy will be the one that feels the lift. There are a few reasons for it. Being the leader in the industry helps, especially when it is trading at a fraction of its peak. A strong balance sheet from Constellation Brands’ (STZ Stock Report) investment does help the company to avoid a cash crunch issue.
[Read More] 3 Top Cannabis Stocks To Watch In June 2020
Bottom Line
A few years ago, marijuana stocks were all the rage. Many investors bank on this space and hope the stocks would go to the moon based on medical and recreational uses. Then, the industry had a big shakeout in 2019 and left huge losses for investors. But, that doesn’t mean the industry is dead. Instead, it will lead investors to look for cannabis stocks that can survive through the storm. That could easily be CGC stock considering its industry leading position. With that being said, is CGC the best marijuana stock to buy in June 2020?
