Cannabis stocks have seen a massive amount of growth in the past few years. The expectation of state-level legalization in the U.S. generates an overall positive momentum in the marijuana space. Not to forget that Canada is going to become the first industrialized country to legalize marijuana. Shall both countries give green light to the pot industry, there’s a high chance that most, if not all marijuana stocks are going to skyrocket.
Like other industries, not all companies are created equal. Hence, some top cannabis stocks are growing at a faster rate than the others. All else being equal, the management that is running a particular cannabis company is particularly important. Sometimes the person running the company could be more important than the quality of their products or services. Why do I say that? Reason being, a bad management could over-leverage or carry out non-strategic acquisitions that wouldn’t be able to add value to the company.
Marijuana is also a growing industry. With growth, comes various expenses and generally high cash burn rate. That said, without healthy balance sheets, many marijuana stocks wouldn’t be able to sustain to reap the benefits when the catalysts mentioned above come into effect. Recently, many marijuana stocks have posted deeper losses for the quarter. Amongst them are, Tilray (TLRY Stock Report), Cronos Group (CRON Stock Report) and OrganIGram Holdings (OGI Stock Report). Cannabis stocks reporting huge loss is no longer a new thing in the market. On the flip side, there are also top pot stocks that are worth the attention. And most importantly, they have stronger balance sheets. With all that in mind, are these two top cannabis stocks on your watchlist?
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Shares of Canopy Growth (CGC Stock Report) soared 8% on Monday after the world’s most valuable marijuana company by market capitalization reported first quarter results that topped Wall Street’s expectations. The company saw its first quarter revenue increased by 22% and EBITDA loss was much better than expected. Marijuana stocks investors cheered the results.
One segment that is worth investors attention are the cannabis-infused beverages, namely Tweed Houndstooth & Soda and Tweed Bakerstreet & Ginger. The company had doubled its throughput in July. It planned to repeat its strategy again in August. Canopy believes cannabis beverages could be a “game-changer” for the industry and is ready to take advantage of the market.
“They also have the right to bring our drinks to the U.S. market and I’m hopeful that we hear from them over the next few months about their plans to bring our drinks to places like Illinois, “I think it would be really exciting to kind of get the game on in the U.S. and see how they actually do in a market such as the one that exists in Illinois.”- David Klein- CEO of Canopy Growth.Top Pot Stocks To Watch In August 2020: Aurora Cannabis
Aurora Cannabis (ACB Stock Report) is one of the bigger names out there in the marijuana space. The company had one of the wildest rides compared to its industry peers. Aurora was on the verge of being delisted from New York Stock Exchange after ACB stock fell below $1. The company avoided potential delisting through share dilution. Certainly not a good way to maintain its listing status if you ask me. However, the company turned a new leaf in May after surprised investors with its third quarter results.
It is now important for Aurora to achieve profitability. Earlier this year, the company told investors that it is going to achieve positive EBITDA by the third calendar quarter this year. To achieve this target, Aurora has made a number of operational changes to reduce expenses.
Besides, there could also be a reduction of its workforce. This does not just affect the working level though, as there will also be restructuring at the executive level. In addition, the closure of five small-scale facilities in the next 6 months should improve the focus of the business.