The past several months haven’t been particularly kind to cannabis stocks, as the hope (and hype) of the long-term potential collides with short-term reality. That is, most of these companies have spent heavily to take the lead in a highly contested race, but don’t yet have the scale needed to drive actual profits.
That day is still coming, at least for several of the names in the business. The question is, which ones will be left standing, picking up the pieces of an ever-growing industry?
Nobody knows for sure; it’s unlikely that even the companies’ chiefs are entirely convinced themselves they’re being built to last. But, with the marijuana industry having only scratched the surface of what it can be, and likely will be, there’s little doubt that at least some of these names could double their current values.
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Here’s a rundown of the top ten cannabis stocks most likely to dish out a triple-digit gain, sooner or later.
Canopy Growth (CGC)
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CGC) was the first name to attract a major partner’s money. In October 2017, booze company Constellation Brands (NYSE:STZ) bought a 10% stake in Canopy Growth, then in August of last year an additional $4 billion investment in CGC stock made Constellation a near-40% stakeholder. The underlying plan was ultimately ensuring access to a supply for the time when a launch of a cannabis-infused beverage made sense.” data-reactid=”32″>It’s arguably the name that started cannabis-mania, as Canopy Growth (NYSE:CGC) was the first name to attract a major partner’s money. In October 2017, booze company Constellation Brands (NYSE:STZ) bought a 10% stake in Canopy Growth, then in August of last year an additional $4 billion investment in CGC stock made Constellation a near-40% stakeholder. The underlying plan was ultimately ensuring access to a supply for the time when a launch of a cannabis-infused beverage made sense.
forced Canopy’s CEO Bruce Linton out of the role. An aggressive acquisition spree chewed up more money well before it was ready to drive a return on the investment.
dozen or so acquisitions Canopy Growth has made over the course of the past year gives the organization a wide array of horizontally and vertically minded ways to monetize cannabis at some point in the future.
Charlotte’s Web Holdings (CWBHF)
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CWBHF) is a more legitimate company than many of its exchange-listed counterparts. An over-the-counter listing is just less of a hassle.” data-reactid=”49″>Don’t let the OTC listing fool you. With a market cap of nearly $1 billion and $86 million worth of revenue for its past four reported quarters, Charlotte’s Web Holdings (OTCMKTS:CWBHF) is a more legitimate company than many of its exchange-listed counterparts. An over-the-counter listing is just less of a hassle.
offers CBD oil, and capsules, in the United States and can deliver their product — legally — in the mail to anywhere in the U.S.
modest $2.2 million. It’s evidence that the business can be profitable though. Net margins should improve as the company scales up.
Aurora Cannabis (ACB)
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ACB) is certainly no slouch on that front. It recently closed on the Hempco deal first announced in April, rounding outs rather robust portfolio too.” data-reactid=”68″>Canopy Growth may be best known, for better or worse, as a rapid-fire buyer of smaller cannabis outfits with the aim of building a large conglomerate. But, Aurora Cannabis (NYSE:ACB) is certainly no slouch on that front. It recently closed on the Hempco deal first announced in April, rounding outs rather robust portfolio too.
It was self-serving to be sure, but Aurora CEO Terry Booth wasn’t off-base when he said of the closed Hempco acquisition “we have assembled a world-class portfolio of high-quality hemp assets that together form the basis of a strong new operating division that will develop CBD-from-hemp around the world.”
focused more on medical marijuana, and less on recreational usage.
It matters. Although it’s more difficult, prices and therefore margins are stronger within the medical marijuana market, where Aurora is quickly demonstrating proficiency.
GW Pharmaceuticals (GWPH)
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GWPH) has absolutely earned a spot on any list of cannabis stocks positioned to double in the foreseeable future.” data-reactid=”90″>It’s a name that is often left out of the discussion because (1) it’s not looking to capitalize on the ongoing legalization of recreational marijuana, and (2) it has been around for years. But GW Pharmaceuticals (NASDAQ:GWPH) has absolutely earned a spot on any list of cannabis stocks positioned to double in the foreseeable future.
first CBD-based drug permitted in the U.S.
sold $102 million worth of the drug.
Hexo (HEXO)
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HEXO) has managed to make some noise for itself.” data-reactid=”109″>It wasn’t one of the names batted around a great deal when marijuana stocks were all the rage during the middle of last year. Since then, Hexo (NYSE:HEXO) has managed to make some noise for itself.
a “hub and spoke” model, where it serves as the hub and supplies cannabis to various partners at the other end of the spoke. There’s room for several.
TAP) is looking to build a cannabis beverage brand with Hexo. Other partners with other focal points will be added in time.” data-reactid=”111″>It already has one such partner: Molson Coors Brewing (NYSE:TAP) is looking to build a cannabis beverage brand with Hexo. Other partners with other focal points will be added in time.
The hard part about the strategy is, Hexo doesn’t appear to be in a hurry to execute it. That patience, however, may ultimately be to the company’s advantage.
Tilray (TLRY)
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TLRY) shares is only a little better than a ‘Hold.’ But, the consensus target is a healthy $64.40 per share. That’s more than twice the current price of TLRY stock.” data-reactid=”127″>It’s curious. The consensus rating on Tilray (NASDAQ:TLRY) shares is only a little better than a ‘Hold.’ But, the consensus target is a healthy $64.40 per share. That’s more than twice the current price of TLRY stock.
It’s not an unusual nuance within the cannabis industry at this time. Analysts aren’t quite sure how to value these names, most of which are startups, and all of which are being lifted at least a little by hype. It’s not easy to see the line dividing what’s likely, and what’s possible.
Still, the average target for Tilray shares marks one of the biggest upsides the professionals expect to see come to fruition.
variety of products, including extracts and dried flower, for users seeking THC as well as CBD. It also sells products on five different continents, making it a geographically diverse player.
Cara Therapeutics (CARA)
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CARA) has largely been omitted from the discussion of cannabis stocks as a whole because it’s not a newcomer catering mostly to recreational users. It’s still a cannabis name though, or will be, eventually.” data-reactid=”143″>As was the case with GW Pharmaceuticals, Cara Therapeutics (NASDAQ:CARA) has largely been omitted from the discussion of cannabis stocks as a whole because it’s not a newcomer catering mostly to recreational users. It’s still a cannabis name though, or will be, eventually.
Cara’s claim to fame at this time is a developmental drug currently just referred to as CR845. It’s a prospective alternative to opioids, which are effective painkillers, but also highly addictive. CR845 also has absolutely nothing to do with cannabis.
Cara Therapeutics’ CR701, however, is a prospective painkiller that specifically uses cannabinoid agonists to block the body’s pain receptors. While still years away from commercialization, the clinical trial setting certainly legitimizes cannabis as real medicine.
OrganiGram Holdings (OGI)
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OGI) has earned a look because it’s one of the few names in the cannabis business that’s profitable. Indeed, with its numbers reported in July, it has been profitable for four straight quarters.” data-reactid=”156″>If nothing else, OrganiGram Holdings (NASDAQ:OGI) has earned a look because it’s one of the few names in the cannabis business that’s profitable. Indeed, with its numbers reported in July, it has been profitable for four straight quarters.
The underpinnings for that unusual claim in the cannabis realm largely reflects the company’s growing acumen. Even though last quarter’s cash production costs grew from 65 cents per gram to 95 cents per gram, that’s still less than the $1.42 per gram Aurora had to spend to supply itself, or the $1.48 Tilray laid out to grow its own supply.
an experiment designed to further improve yield. It failed, so the company won’t be attempting it again.
Medipharm Labs (MEDIF)
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MEDIF). This company is also on firmer footing than many of its exchange-listed rivals, even if most cannabis investors have never heard of it.” data-reactid=”171″>As was the case with Charlotte’s Web Holdings, don’t be put off by the OTC listing of Medipharm Labs (OTCMKTS:MEDIF). This company is also on firmer footing than many of its exchange-listed rivals, even if most cannabis investors have never heard of it.
extraction. Leveraging technology with experience, this company can turn raw marijuana into pure cannabis that meets the exacting standards most CBD suppliers expect in the current, scrutinizing environment.
grow nearly 40%, followed by another 32% revenue leap next year.
That still won’t be enough to drag Medipharm out of the red, but scale should pay off soon enough.
Cronos Group (CRON)
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CRON) to your list of cannabis stocks with the potential to double at some point in the future.” data-reactid=”189″>Finally, add Cronos Group (NASDAQ:CRON) to your list of cannabis stocks with the potential to double at some point in the future.
three brands: Peace Naturals, Cove and Spinach. And, like Tilray, it has a presence on five different continents.
notes “We expect Cronos to have modest near-term revenues from Canadian cannabis production, but believe it has significant potential growth opportunities with CBD products in the US, including through its pending acquisition of the Lord Jones brand.”
MO) also bodes well, even if it has accomplished little so far.” data-reactid=”194″>Its partnership with Altria Group (NYSE:MO) also bodes well, even if it has accomplished little so far.
jamesbrumley.com, or follow him on Twitter, at @jbrumley.
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