Marijuana Stocks

You hear that? That's the sound of the beginning of a big rebound in marijuana stocks. Year-to-date, the ETFMG Alternative Harvest ETF (NYSEARCA:MJ) is already up almost 10% -- and we are less than three weeks into the year. That's a huge gain in a short amount of time.The big rebound in pot stocks can be attributed to favorable fundamental developments (multiple cannabis companies have reported strong fourth quarter numbers in early January), favorable legal developments (among other things, Illinois just legalized recreational marijuana), and a whole bunch of investors deciding that with the new year, comes new opportunity.That's the good news for cannabis bulls. The better news? This big rebound in marijuana stocks is just getting started.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOver the next several quarters, everything is going to improve for the cannabis sector. Demand trends will re-accelerate thanks to new vapes and edibles products, as well as retail footprint expansion. Supply overhang issues will ease with rebounding demand. International markets will start to take off as governments around the world follow in Canada's footsteps. Revenue growth trends will improve. Margins will bounce back. Losses will narrow.All in all, things will just get better for the cannabis sector in 2020, and as they do, depressed and beaten-up pot stocks will rebound. * The Top 5 Dow Jones Stocks to Buy for 2020 With that in mind, let's take a deeper look at four marijuana stocks to buy for the big 2020 rebound. Canopy Growth (CGC)Source: Shutterstock The cannabis market's biggest and most important company, Canopy Growth (NYSE:CGC), has been leading the pot stock rebound in 2020 so far. Year-to-date, CGC stock is up more than 15%.Canopy will continue to be a leader in this rebound for the rest of 2020 for one very simple reason: this is the best cannabis company out there by a mile.They have the biggest balance sheet -- thanks to a multi-billion dollar investment from Constellation Brands (NYSE:STZ) -- with the most resources and firepower to invest in things like product development, international expansion, strategic acquisitions, and production build-out. They also have the biggest sales base, the most production capacity, and the widest global distribution network.The management team is arguably the best in the business, as Constellation has infused the company with experienced talent. They also have the most visible pathway to dominating the ultra-valuable U.S. market, thanks to a planned acquisition of U.S. cannabis company Acreage.All in all, Canopy Growth has significantly differentiated itself from the pack in the cannabis world. As the leader, if pot stocks keep rebounding throughout the rest of the year, CGC stock will lead that rebound. Cronos (CRON)Source: Shutterstock The only other "high quality" cannabis company that has won the multi-billion dollar support of a consumer staples giant is Cronos (NASDAQ:CRON). This unique feature should propel meaningful out-performance in CRON stock in 2020.Cannabis market trends will rebound in 2020 thanks to new products, retail footprint expansion, favorable legislative progress, and international growth, among other things. As those trends rebound, investors will rush back into the marijuana industry like its early 2019 all over again.When investors flocked into the space back then, they did most of that flocking into two names -- Canopy and Cronos -- because those were the smartest and safest investments given their fortified balance sheets, huge investment capability, and tremendous financial support. Of note, Cronos stock outperformed Canopy stock in the first three months of 2019 by a tally of 80% to 60%, mostly thanks to the fact that CRON stock was cheaper than CGC stock (15-times one-year forward sales for CRON, versus 30-times for CGC at the beginning of 2019). * 10 Cheap Stocks to Buy Under $10 In 2020, the same dynamic will repeat. Investors will rush back into the space amid improving fundamentals and trends. They will specifically rush back into the smartest and safest investments in the space, CRON and CGC. And CRON will be the bigger winner, because CRON stock (9-times one-year forward sales) remains way cheaper than CGC stock (14-times one-year forward sales). Aphria (APHA)Although most pot stocks are up big in early 2020, shares of cannabis producer Aphria (NYSE:APHA) are not, mostly because the company reported second quarter numbers in January that missed across the board. Revenues missed estimates, as did profits. And management dramatically cut its full-year guide.Consequently, APHA stock is actually down 1% in 2020, while many of its marijuana peers are up 10% or more.This weakness won't last. It's a gross overreaction to a few headline second quarter misses. Underneath those misses, the numbers were actually pretty good. Revenue growth accelerated sequentially, from up 8% quarter-over-quarter in Q1 to up 9% quarter-over-quarter in Q2. Volume growth also accelerated, and by way more, going from 7% growth in Q2, to 18% growth in Q2. Gross margins reversed course, after dropping from 53% in Q4 to 50% in Q1, and shot back up to 57% in Q2. At the same, Aphria reported a huge sequential increase in adjusted EBITDA after a sequential drop in Q1.In other words, all of the company's important underlying trends improved meaningfully in the second quarter. Revenue, volume, margin, and profit trends all got better.And that's before the launch of new vapes and edibles products. As such, the numbers will only get better in the third and fourth quarters. As they keep improving, investors will push APHA stock way higher, especially considering its relatively depressed valuation base (2-times one-year forward sales). Aurora (ACB)Source: Shutterstock Last, but not least, on this list of marijuana stocks to buy for the big rebound in 2020 is Aurora (NYSE:ACB).Aurora has long been the second-biggest player in the Canadian cannabis market, coming in right behind Canopy in terms of sales, volume, and production capacity. But investors have increasingly expressed concerns over the company's balance sheet and liquidity, as Aurora features one of the worst balance sheets in the cannabis sector and has a major cash burn problem.Ultimately, these concerns have kept ACB stock depressed. These concerns could ease dramatically in 2020. Aurora will launch of suite of edibles and vapes products over the coming months. They should also be opening a ton of new stores.This combination will reignite demand trends at Aurora, and revenue growth rates should start improving. As they do, more favorable supply-demand dynamics will push up margins. Bigger revenues plus bigger margins equals smaller losses. Smaller losses mean less cash burn.As cash burn becomes less of a problem in 2020 (and as the company's improved revenue growth trajectory illuminates a more visible pathway towards profitability), investors will become less concerned about the company's balance sheet and liquidity. The more those concerns fade, the more ACB stock will rally.As of this writing, Luke Lango was long CGC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 5 Dow Jones Stocks to Buy for 2020 * 7 Fintech ETFs to Buy Now for Fabulous Financial Exposure * 3 Tech Stocks to Play Ahead of Earnings The post 4 Marijuana Stocks to Buy for the Big 2020 Rebound appeared first on InvestorPlace.

Hexo Corp. shares slid 6% in premarket trade Friday, after the Canadian cannabis company said it plans to sell shares to raise $20 million in funding. The Ottawa-based company said it has entered an agreement with institutional investors to sell 11.9 million share priced at $1.67 each, a discount to its $1.78 closing price Thursday. The company has further agreed to kssue warrants to purchase 5.9 million shares at an exercise price of $2.45 a share. The warrants will have a five-year term. Shares have fallen 63% in the last 12 months, while the S&P 500 has gained 26%.

Following a disastrous performance in 2019, marijuana stocks are staging a huge comeback in early 2020. So far this year, the ETFMG Alternative Harvest ETF (NYSEARCA:MJ) is already up about 10%, representing an impressive average gain per trading day of nearly 1%.Leading the charge are the usual suspects. So far this month, Canopy Growth (NYSE:CGC) is up 15%. Tilray (NASDAQ:TLRY) has gained 19%. and Cronos (NASDAQ:CRON) has added 6%.But one marijuana stock missing out on this party is Aphria (NYSE:APHA). Best known as the only cannabis company to report a quarterly profit so far, APHA has not rebounded with its peers in 2020. Instead, Aphria stock is flat in 2020.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis relative underperformance of APHA stock won't last.Aphria's trends are too favorable, its fundamentals too good, and its valuation too discounted to keep Aphria stock depressed for much longer. As marijuana stocks continue to rebound throughout 2020 amid favorable cannabis trends, Aphria stock will turn into the one of the segment's hottest stocks. Indeed, my estimates indicate that Aphria stock could more than double this year.Here's how that could happen. Marijuana Stocks Will Keep ReboundingCentral to the bull thesis on APHA stock is the idea that the entire cannabis sector will rebound dramatically in 2020.Three positive catalysts will drive that rebound. First, the currently depressed demand trends of Canada's legal cannabis market will improve significantly in 2020. The factors that will bring about its improvement are the introduction of new edibles and vape products, more aggressive launches of new stores, and logistical improvements by legal suppliers and distributors. The demand rebound will turn falling revenue growth rates across the whole industry into rising revenue growth rates. * The Top 5 Dow Jones Stocks to Buy for 2020 Second, the supply glut of Canada's legal market will ease due to accelerating demand trends. Economics 101 teaches that falling supply and rising demand lead to higher prices. Higher prices create higher margins. Consequently, the cannabis industry's margin weakness of 2019 could turn into margin strength in 2020.Third, various cannabis markets outside of Canada will gain traction and turn into meaningful revenue contributors for legal suppliers. That is, governments around the world will adopt more lenient marijuana laws, thanks to increasing pressure by consumers for such laws. As that happens, more countries will legalize cannabis in 2020. At the same time, more and more states across the U.S. will legalize marijuana, and more and more Canadian cannabis companies will jump into the U.S. market.The marijuana industry seems optimally positioned for a huge rebound in 2020, meaning that the recent strength of the sector's stocks will most likely persist. Aphria Stock Will Join The RallyAphria stock is currently sitting out the big rally by cannabis stocks. That won't last forever. Soon enough, Aphria will join the rally, and when it does, Aphria stock could explode higher.Investors have been relatively bearish on Aphria recently because the company's second-quarter earnings report, delivered in early January, missed analysts' average expectations, and the company, in conjunction with the results, cut its full-year revenue and profit guidance. But the miss doesn't tell the whole story.Aphria's trends are actually pretty good. Its quarter-over-quarter cannabis revenue growth and its QoQ cannabis volume growth accelerated compared with Q1's rates. Those two data points imply that demand for Aphria's cannabis is rising. At the same time, its cannabis gross margins improved tremendously, rising from 50% in Q1 to 57% in Q2. The data supports the idea that improving supply-demand dynamics are meaningfully lifting Aphria's margins.Aphria has all the momentum it needs to join the marijuana stock rally, as demand for its products is accelerating and its margins are expanding.Eventually, these improving growth trends, combined with the massively discounted valuation of APHA stock, will produce an epic rally by the shares.Analysts, on average, expect Aphria's fiscal 2022 earnings per share to be 40 cents. That estimate will prove to be conservative. My modeling indicates that improving demand and margin drivers will push the company's FY22 EPS to 50 cents or higher. Based on a forward earnings multiple of 20, which is average for growth stocks, my 2021 price target for Aphria stock is $10.The shares closed at $5.19 yesterday. The Bottom Line on APHA StockAphria stock has sat out the 2020 marijuana stock rally so far, but it won't remain on the sidelines forever. Instead, as soon as worries about the Q2 earnings report fade, the shares will start to climb higher. Given how cheap this stock is and how good APHA's fundamentals are, the rally will be huge and could reach 100%.As of this writing, Luke Lango was long CGC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 5 Dow Jones Stocks to Buy for 2020 * 7 Fintech ETFs to Buy Now for Fabulous Financial Exposure * 3 Tech Stocks to Play Ahead of Earnings The post Here's How Aphria Stock Could Double in 2020 appeared first on InvestorPlace.

Cronos (NASDAQ:CRON), the cannabis company best known for its multi-billion investment from Marlboro maker Altria (NYSE:MO) already is having a good year. Year-to-date, CRON stock is up more than 10%.Source: Shutterstock But Cronos is not alone. Pot stocks are bouncing back in 2020, with the ETFMG Alternative Harvest ETF (NYSEARCA:MJ) up more than 10% already through the first two weeks of the year amid favorable fundamental developments (a handful of marijuana companies reported strong numbers in early 2020) and legal developments (among other things, Illinois just legalized recreational marijuana).Here's my two cents: early 2020 strength in CRON stock will extend into a year-long rally for the resurgent pot stock.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMy rationale is simple. The whole cannabis sector will bounce back in 2020. As it does, Cronos will bounce back even more, because it represents one of the two highest quality investments in the space, and quality will become of increasing importance in this space as a clear divergence emerges between cannabis winners and cannabis losers.Net net, Cronos looks good in 2020. I think shares will head materially higher. Here's a deeper look at why. The Pot Stock Rebound Is for RealThe big rebound in pot stocks is more than a head-fake or dead-cat bounce. It's the real deal, and the start of something much bigger. * The Top 5 Dow Jones Stocks to Buy for 2020 The legal cannabis market will inevitably be huge. Drug usage data among U.S. high school students shows a clear trend: young consumers are increasingly smoking weed, and today, they smoke weed almost as much as they drink alcohol.The demand is there. The supply will get there, too, because consumer and government attitudes are rapidly shifting in favor of legalizing cannabis. Big demand plus big supply equals big market.How big? Well, if you consider that the global alcoholic beverage market is in the $1 trillion-plus range and that cannabis consumption among certain demographics is nearly equal to that of alcohol consumption, it's pretty easy to see the fully-legal global cannabis market measuring in the several hundred billion dollar range one day.Outside of Canopy Growth (NYSE:CGC), all publicly traded cannabis companies feature sub-$3 billion market caps.Clearly, these companies aren't priced appropriately. They aren't priced appropriately because investors got overly bearish in 2019 amid early challenges in Canada, the U.S. and elsewhere, and thought that these challenges would last forever.They won't. In 2020, they will fade. Demand trends will improve. Logistics will improve. Retail distribution will expand. Legislation will move forward. Everything will get better because everything is always better in Year 2 than in Year 1.Pot stocks will bounce back. And they will hold onto these gains, because the cannabis market will only get bigger and better over the next few years as it marches towards its several hundred billion dollar potential. Cronos Is a High-Quality PickIn the cannabis space, Cronos stock is a high-quality pick, and that's important because quality will be a key differentiation going forward.There are a lot of cannabis companies out there. Not all of them will survive. When you look at the alcoholic beverage and tobacco industries, the two best comps for the cannabis industry, those markets are essentially oligopolies, dominated by only a handful of conglomerates.The cannabis market will pan out no differently. It will go from hundreds of equally-sized players today, to a handful of super-sized players in a decade. This market consolidation means that while the cannabis market will grow by leaps and bounds over the next several years, this rising tide won't lift all boats; high-quality boats will rise a bunch, and low-quality boats will fall by the wayside.Cronos is unequivocally one of the high-quality boats in this space for one big reason: the multi-billion dollar investment Altria poured into the company.That huge investment is a vote of confidence from a seasoned and smart management team over at Altria. It's also enough money to shore up the balance sheet for the foreseeable future, absorb cash burn, and ease pressure on the company to cut corners to turn a profit.Most importantly, it gives Cronos ample resources to invest in the cannabis space over the next several years. Only Canopy can rival Cronos in terms of this investment firepower.Ultimately, then, CRON is one of the top two highest quality picks in the cannabis space. Thus, as pot stocks begin their multi-year rebound in 2020, Cronos will be at the epicenter of this rebound. Bottom Line on CRON StockIn a nutshell, what you have with Cronos is a sub-$3 billion company with a very reasonable opportunity to be one of the largest players in a potential several hundred billion global cannabis industry one day. That's a compelling long-term value prop.The market turned a blind eye towards this long-term value prop in 2019 amid near-term cannabis market challenges. In 2020, those challenges will fade from the scene. As they do, investors will increasingly adopt the long-term bull thesis as a consensus thesis. The more this happens, the more CRON stock will rebound.As of this writing, Luke Lango was long CGC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The Top 5 Dow Jones Stocks to Buy for 2020 * 7 Fintech ETFs to Buy Now for Fabulous Financial Exposure * 3 Tech Stocks to Play Ahead of Earnings The post CRON Stock Could Ride the Cannabis Resurgence into a Year-Long Rally appeared first on InvestorPlace.

With a greater legislative push to legalize recreational marijuana, cannabis ETFs are soaring to start the year and are likely to continue doing so.

Two of these - the Marijuana Freedom and Opportunity Act and the Marijuana Opportunity Reinvestment and Expungement (MORE) Act - involve federal descheduling of cannabis from the Controlled Substances Act. The latter has already received approval from the House Judiciary Committee.

ETFs that track the budding cannabis industry led the charge on Wednesday as Organigram (NasdaqGS: OGI) surged on first-quarter revenue that more than doubled expectations. Among the best performing non-leveraged ...

Curaleaf Holdings Inc. said Wednesday it has closed an upsized $300 million senior secured term loan facility with an interest rate of 13% per annum. Proceeds of the deal will be used to refinance existing debt, pay fees and expenses from previously announced acquisitions, to fund capex and for general corporate purposes. "Most importantly we strengthened our balance sheet without diluting our existing shareholders," Chief Executive Joseph Lusardi said in a statement. Cannabis companies have been struggling to raise capital of late after a sharp correction in the sector, which has been developing more slowly than expected and continues to compete with the black market. A number of companies, including Aurora Cannabis have been forced into highly dilutive capital raisings. Curaleaf shares have gained 22% in the last 12 months, while the ETFMG Alternative Harvest ETF has fallen 41% and the S&P 500 has gained 26%.

Canadian cannabis company Aphria Inc.'s shares rose 2.4% in premarket trade Wednesday, after CIBC upgraded the stock to neutral from underperform and said it is more constructive on the stock now that an inevitable cut to guidance has been announced. "There will be issues to contend with, such as ongoing elevated capex spend and substantial working capital investments," analysts John Zamparo and Krishna Ruthnum wrote in a note. "But the balance sheet is relatively strong and market share gains are encouraging." The analysts raised their price target on the stock to C$7.00 ($5.36) from C$6.50. The company's revised guidance--it now expects 2020 revenue of C$575 million to C$625 million versus earlier guidance of C$650 million to C$700 million--is "much more achievable" although it may not be conservative enough, the analysts wrote. But with consensus below the new range, future guidance risk has moderated, said the note. Aphria shares have fallen 25.5% in the last 12 months, while the ETFMG Alternative Harvest ETF has fallen 41%. The S&P 500 has gained 26%.

Ohio Gov. John Kasich signed House Bill 523 into law in June 2016, legalizing medical cannabis in the state. The Buckeye State has run into problems such as patient dissatisfaction in the first year of the state's medical marijuana program, and the state has declined to add conditions such as anxiety and autism to the list of qualifying conditions. End-of-year data from the state Medical Marijuana Control Program revealed that $58.3 million in product sales had been made as of Jan. 6 across the state's 46 operating dispensaries.

Shares of Aphria Inc. slumped 4.8% in premarket trading, reversing an earlier gain of as much as 7.3%, after the Canada-based cannabis company reported fiscal second-quarter losses that were in line with expectations and revenue that missed expectations, but provided an upbeat full-year sales outlook. For the quarter to Nov. 30, Aphria swung to a net loss of C$8.2 million ($6.3 million), or 3 cents a share, from a profit of C$54.8 million, or 22 cents a share, in the same period a year ago. The FactSet consensus was for a per-share loss of 3 cents. Net revenue rose more than 5-fold to C$120.6 million ($92.2 million) from C$21.7 million, but was below the FactSet consensus of C$129.8 million. Kilograms sold rose 18% to 7,062 while cash cost to produce dried cannabis fell 22% to C$1.11 per gram. For fiscal 2020, the company expects revenue of C$575 million to C$625 million, above the FactSet consensus of C$571 million. "We are continuing to expand our capabilities internationally with solid progress during the quarter in Germany and South America and look to monetize non-core assets," said Chief Executive Irwin Simon. "We are confident in our market position and our ability to generate sustainable profit growth." The stock has rallied 25% over the past three months through Monday, while the ETFMG Alternative Harvest ETF has lost 5.8% and the S&P 500 has gained 11%.

The U.S.-listed shares of Aurora Cannabis Inc. tumbled 7.5% toward a 2 1/2-year low in morning trading Friday, after BofA Securities analyst Christopher Carey turned bearish on the Canada-based cannabis company, citing balance sheet concerns and a lack of visibility "on several fronts." Post cut his rating to underperform, after being at neutral for the past six months, and slashed his price target by 63%, to C$1.50 from C$4.00. The new target is 33% below the Canada-listed stock's current prices. Post said he expects balance sheet risks to remain a core investment thesis in 2020, with "lingering uncertainty especially on financial covenants." He said he struggles to envision a scenario where the shares have "sustainable" support. He expects "viability issues" to carry into the second half of this year as cash remains tight, meaning a key upside catalyst is unlikely to materialize, "absent an extraordinary event." Post's downgrade comes after Piper Sandler's Michael Lavery lowered his rating to sell and his price target to $1, also citing balance sheet concerns, as well as weak European Union sales. Aurora's U.S.-listed stock, which is on track for the lowest close since July 2017, has plunged 54% over the past three months, while the ETFMG Alternative Harvest ETF has dropped 11% and the S&P 500 has gained 12%.

Green Organic Dutchman Holdings Ltd. said Thursday that President Csaba Reider will leave the Canada-based cannabis company, as part of a executive leadership consolidation aimed at reducing costs and improving cash flow. Chief Executive Brian Athaide will assume Reider's duties. Vice President of Sales Mike Gibbons will also leave the company, with VP of Medical Commercialization Robert Gora assuming the consolidated role of VP of national sales. "This will result in significant G&A savings and a leaner more efficient organization," Athaide said of the management changes. " We are also very focused on ramping up production, expanding our product portfolio with innovative organic products and gaining market share across the country." The U.S.-listed stock has plunged 52.4% over the past three months, while the ETFMG Alternative Harvest ETF has tumbled 17.4% and the S&P 500 has climbed 11.4%.

The U.S.-listed shares of Canopy Growth Corp. slumped 2.8% in morning trading Wednesday, after Canada-based cannabis company's largest shareholder announced a writedown of its investment that was greater than previous writedowns. Constellation Brands Inc. , which owns about a 35% stake in Canopy, announced fiscal third-quarter Canopy equity losses of 25 cents a share, which reduced the company's comparable EPS for the quarter to $2.14 from $2.39. Constellation had reported Canopy equity losses of 20 cents a share in its fiscal second quarter and losses of 20 cents a share in the first quarter. In April 2019, the company had said it said fiscal 2019 earnings included $1.97 billion in unrealized gains from its Canopy investments. Canopy's stock has tumbled 59% since the end of Constellation's fiscal 2019 on Feb. 28, 2019, while the ETFMG Alternative Harvest ETF has plunged 57% and the S&P 500 has gained 16%.

Exchange-traded funds will likely become more personal but also more popular, dwarfing the amount of assets held by mutual funds.

Hexo Corp. and Aurora Cannabis Inc., shares lead weed stocks mostly lower Monday, adding to what is shaping up to be a third straight day of losses in 2020.

Illinoians are still celebrating the legalization of recreational marijuana sales across the state, which kicked off on New Year’s Day. Cresco Labs CEO & Founder Charlie Bachtell joins Yahoo Finance's Zack Guzman and Julia La Roche, along with "The Morning Brew" Business Editor Kinsey Grant, to discuss.

June 2019 saw Illinois become the 11th state to legalize the sale/purchase of marijuana, and it rang in the new year with its first recreational marijuana sales. Chicago-based Cresco Labs, a cannabis company, purportedly spent weeks training over 500 employees in Illinois on educating new marijuana users prior to the first of the new year. “The level of excitement has far outweighed the launch of an iPhone or new pair of Jordan [shoes],” Cresco Labs spokesman Jason Erkes told CNBC.

2020 marked the first day of legal weed sales in Illinois. Yahoo Finance's Zack Guzman and Heidi Chung discuss the impact for businesses with Former LVMH Chairman of North America Pauline Brown on YFi PM.

Tilray Inc. announced Thursday a deal with InterCure Ltd. subsidiary Canndoc Ltd., in which 2.5 tonnes of medical cannabis will be shipped to Israel by Tilray's Portugal-based subsidiary, Tilray Portugal Unipessoal Lda. The cannabis, which is slated to arrive in early-January, will be the first medical cannabis import that is allowed to enter Israel. In addition to the agreement, Tilray said it has agreed to buy up to 5 tonnes of whole flower from Canndoc beginning in mid-2020. If future Israeli regulations allow, Tilray said the whole flower will be shipped to Tilray's Portugal facility to be turned into GMP-certified finished product, to be distributed across Europe. Tilray's stock fell 3.1% in morning trading. It ran up 9.0% on the last day of 2019, but still fell 76% last year. In comparison, the ETFMG Alternative Harvest ETF tumbled 31% in 2019 while the S&P 500 rose 29%.