Top 3 MARIJUANA Stocks for 2019 – Best Cannabis Stocks for 2019


hey YouTube I’m Jimmy in this video I’m
gonna go through the 3 cannabis stocks I think are pretty interesting for 2019
now 2018 was a pretty interesting year for cannabis in general because a lot of
stocks went public Canada made it legal so it’s been a
pretty chaotic ride now one of the reasons a lot of companies are listing
like crazy on different exchanges both in the United States and in Canada is
that marijuana is gradually getting more legal like I mentioned in Canada but
it’s also getting gradually more legal in the United States different states I
think 30 or so have legalized it at the medical level and then there’s a
handful that have legalized at the recreational level and then just
recently I know president Trump signed a farm bill that had the legalization of
hemp in there so the theory is that it’s gradually getting to be more likely that
marijuana will be legal at some point in the United States and if that happens
cannabis stocks and the cannabis industry is going to get larger and
larger and as they get larger we’re going to get more efficient as they get
more efficient it’s going to become more and more interesting for investors so
now our question is what cannabis stocks do we think are the best and how much do
we think that we can realistically profit from them so I created this heat
map and this shows different marijuana stocks that are available in either the
United States or Canada the size of the box shows how big the market cap
is the bigger the box to bigger the market cap so first let me start with
the problem that I was having when I was doing my research let’s take this
largest one for example WEED.CN that’s the ticker for Canopy Growth
that trades in Canada now I want to point out that this is by no means all
the marijuana stocks frankly they’re just the stocks that I had I could find
enough information to do a decent amount of research on so if you know of any
other good ones that I don’t mention here or that aren’t on this board
by all means put them in the comments below so canopy growth has done about 94
million dollars in revenue in the past four quarters but they have a market cap
right now of about 18 billion dollars which means that if we were to buy it
right here we would be paying more than a
hundred times sales to put that in perspective if we were to buy coca-cola
right now we would pay about six times sales if we buy Netflix we’ll pay about
ten times sales if we buy Amazon four time sales and canopy growth isn’t an
outlier in this market tilray trades at about 200 times sales Arora
cannabis trades at about 85 times sales so I bring this out just so we’re all on
the same page we’re not going to find any value stocks in the cannabis market
that being said I still think that there’s a fortune to be made assuming we
can play it correctly so for me the question that I was asking myself is is
there still profit here and how can we go about achieving a reasonable profit
for the risk we’re taking and investing in something that’s trading so much
further above sales or revenue or whatever you want to call it okay so now
we know the risks of investing in stocks like this when this market eventually
gets priced like the rest of the market does many of these stocks are gonna fall
by like 90 percent of what they’re currently priced at that being said I do
think that if we can identify the companies that are most likely to thrive
for many years because at the end of the day it’s only gonna be a handful of
these companies that dominate the marijuana market and much like the tech
bubble back in the early 2000s well you get stocks like Amazon or Google to rise
out of what happened there and look at what those the companies are doing today
so a few of these companies are likely to do very well but most of them aren’t
going to so the time I spent researching these marijuana stocks well I was
looking for that a handful of companies that I thought would be leaders for many
years and ideally what would happen is they’re likely to get bought out by one
of the major players in a similar industry a lot like the alcoholic
beverage company constellation brands that bought a piece of canopy growth so
with that in mind let’s take a quick look at three companies that I think
will emerge from this whole mania and do well in the long haul and then at the
end I got a few sort of runner-ups so our first one which i think is the
most obvious one is canopy growth ticker symbol WEED that’s in Canada in the U.S. it’s CGC so this is actually where I started my
research because I wanted to know what would lead Constellation Brands to pump
millions of dollars multi billions of dollars multiple times into this company
right now they own about 37 or 38 percent of canopy growth and went the
last round of financing constellation bought the option to buy more shares and
if they were to exercise that option they would end up with a controlling
stake of canopy growth now when constellation announced the
second round of financing going to canopy growth the stock jumped like 30
percent so that’s what we’re after and I think that this could happen to a few of
the key players and the reason I went with canopy first is frankly they’re a
bit safer having constellation behind them as likely to put a floor under what
could happen to them from a negative standpoint they’re likely not to fall
nearly as badly as everybody else because they have so much money behind
them and this brings us to company number two with this one we’re gonna go
with a slightly smaller company and that company is OrganiGram ticker symbol OGI they trade in Canada so OrganiGram only did about 12 million dollars
in revenue over the past 12 months but that’s expected to jump drastically over
the next couple of years now OrganiGram is a producer of dried cannabis
and cannabis oil products and one of the things that struck me about this company
is that over the past few years they’ve won a ton of awards for the quality of
their products plus OrganiGram has already gathered the necessary financing
to drastically increase the size of their production bringing their
production to more than 110,000 kilograms per year by the end of 2019 so
what we end up with is a high-quality producer that can make a ton of product
for me this makes a lot of sense for a company like constellation brands or
perhaps one of their competitors to get behind them and invest in that type of
company because if I’m a giant brand like constellation well I don’t need the
product I don’t need the distribution I’ve already got that what I do need is
I need a high quality product and I need a lot of it so when I put my
distribution network behind it you the manufacturer can produce a ton of the
product we need now this brings us to our third company Aphria ticker symbol APHA now this is an interesting one because Aphria got slammed coming
into 2019 and one of the key reasons is that an analyst did a research report
and it turned out that the company was buying assets from management at
extraordinarily inflated prices and once the report came out while Aphria stock
dove down about 50% well since then the CEO and one of the co-founders have
announced that they’re stepping down now fundamentally this doesn’t change the
fact that Aphria is still a pretty good business in fact just recently Green
Growth Brands announced that they’re going for an acquisition of Aphria so
it’s possible that that goes through and if it does go through out I would expect
for it to be finalized at a premium to the current price of about 7 bucks a
share now I could have easily added Aurora stock to this list or even TilRay
right but unfortunately TilRay of their shares outstanding
it’s like 37 percent or some crazy high number like that of those shares
outstanding are held by short sellers and for me that made me nervous one or
two things could happen maybe a short squeeze comes and the stock pops because
they get driven out but on the other side it makes me nervous that there are
so many investors that are willing to put their money on the line that they
feel that the company is that overvalued so I thought it was best to stay out of
it on the flip side Aurora on the other hand I thought had a ton of potential
and I actually had it at number 3 in my list but then when Aphria took a
nosedive at the end of the month that just looked like a better value as much
as you can have a value in this space so I left a Aurora off the list so this
list was a list of four instead of a list of three well then Aurora
definitely would have made the list if it was a list of five probably where to
gone with MedMen as the fifth company that being said what do you think of
these companies are these the types of companies that you would add to your
portfolio let me know what you think in the comments below
are there any companies that I left off the list that you think will be a leader
many years from now let me know if you haven’t done
so already hit the thumbs up don’t forget to hit subscribe and thanks so
much for sticking with me to the end of the video and I’ll see in the next video
thanks

Leave a Reply

Your email address will not be published. Required fields are marked *