The wave of marijuana news has its ups and downs. And recently, there’s a big move to the upside. That’s due to an announcement that Joe Biden will pardon thousands of people for federal marijuana offenses.

It’s slow moving but there’s a lot of positive momentum for legalization. I’d guess it’s only a matter of time before it’s legalized on the Federal level. And this will open up new profit opportunities.

That’s why I’ve tracked down some of the best marijuana stocks. On top of that, you can buy in at much better prices today than in the past few years. So, without further ado, let’s dive into the companies…

Best Marijuana Stocks

• Canopy Growth (Nasdaq: CCG)
• Altria (NYSE: MO)
• Scotts Miracle-Gro (NYSE: SMG)
• Cronos Group (Nasdaq: CRON)

Each of these marijuana stocks comes with a different set of pros and cons. Some provide diversification outside of the cannabis industry, while others don’t. So, let’s look at some highlights from each company.

Canopy Growth

Canopy Growth is a leading Canadian-based marijuana company. It was the first marijuana company to list publicly in North America. That was in 2014 on the Toronto Stock Exchange, and in 2018, it listed on the New York Stock Exchange. Then in 2020, it moved to trade on the Nasdaq.

Canopy is helping to build up a wide range of brands such as Tweed, Spectrum Therapeutics, Martha Stewart, Ace Valley and many others. So this marijuana stock provides some diversification within the industry. It’s also attracted some large investors…

Constellation Brands (NYSE: STZ) bought into the company and increased its stake in 2020. It now owns close to 40% of the company. Since then, this marijuana stock hasn’t fared too well. Shares are down more than 90% from their highs and the company isn’t yet profitable. However, it still has a strong balance sheet and should be able to grow in the years ahead.

Altria

Altria isn’t a pure play, but this company is a major player in a related industry. It can use its tobacco industry expertise to profit as marijuana becomes more widely adopted.

Altria has applied pressure in Congress and at the state level to push cannabis-friendly laws. In 2018, it also spent $1.8 billion to buy a stake in Cronos, a multi-national cannabis company. This investment hasn’t played out too well, but Altria is learning a lot from the deal. This can help with future expansion in the marijuana market.

Investing in a tobacco company isn’t for everyone, but it’s been rewarding for long-term investors. Thanks to its steady customer base and revenue, it produces steady cashflows. This has allowed Altria to pay big dividends and also expand into newer markets such as the cannabis industry.

Scotts Miracle-Gro

For another one of the best marijuana stocks, Scotts Miracle-Gro isn’t a direct play. But it still gives good exposure to the cannabis industry. I consider the company a “picks and shovels” play for marijuana. For example, during the gold rush, selling picks and shovels created many fortunes as well. The same was true for the saloon owners.

Scotts Miracle-Gro sells a wide range of supporting equipment. It has been acquiring and building out hydroponic products. This is a huge growth opportunity as many marijuana growers use hydroponic systems.

Scotts Miracle-Gro is a beaten down stock. It’s down more than 80% from its highs. Although, the risk-to-reward at its current price is looking more favorable for long-term investors.

Cronos Group

Cronos Group is another Canadian marijuana company. And as mentioned earlier, Altria is a large investor in the company.

Cronos Group is focused on advancing cannabis research, technology and product development. It’s also building up a portfolio of brands such as Spinach, Peace Naturals, Lord Jones and Happy Dance.

The company isn’t yet profitable but it’s growing its revenue. It has a lot of room to expand and even more so as regulation eases up. And similar to the other stocks on this list, investors have beaten it down. It’s down more than 80% from its all-time highs.

Final Thoughts

The cannabis industry became a bit crowded a few years ago. It’s since cooled down and now with lower prices, there are better buying opportunities.

There’s been a huge shift in public opinion towards marijuana. More states continue to move to legalize it and I wouldn’t be surprised to see the Feds easing up in the years ahead. As that happens, it should open up better operating opportunities for marijuana businesses.

This bodes well for the best marijuana stocks. Although, they come with plenty of risk. So, always do your own research before investing. I hope this list is a good starting point.

Going one step further, check out these best investment newsletters. They’re free and packed with tips and tricks from investing experts. They cover a wide range of investing topics and trends. Here at Investment U, we strive to deliver the best investment research and ideas…

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Hempacco IPO: What to Expect

Hempacco is a CBD and hemp-based cigarette company out of California. Overall, it’s goal is to become a major disruptor to the tobacco industry. It plans to do this by offering smokers a non-nicotine and tobacco alternative. Hempacco has a 53,000 sq. ft. warehouse and is currently manufacturing herb and hemp cigarettes with various flavors, aromas and functions.

Now, investors have taken notice as the Hempacco IPO hits the market. And the company is listing on the Nasdaq under the ticker symbol “HPCO.” According to the S-1 filing with the SEC, the HPCO IPO plans to raise $6 million by offering one million shares at a price of $6 per share. This is a reduced offering, as the company originally filed to offer three million shares at a price range of $4 to $6 per share.

Should You Invest in Hempacco?

The IPO process can be grueling for companies. That’s why it’s so important to do your due diligence before investing in an initial public offering. Take a closer look at the S1 filing and do background research on the company, its competitors and its products. Look at its industry, market capitalization and long-term growth plans. In addition, scour the internet for recent press and news headlines.

The Hempacco IPO is intriguing for many reasons. First and foremost, it’s looking to take down a goliath in the $1 trillion tobacco industry. Many have tried it before and failed. But it has the hemp industry to lean on, which is worth billions in its own right.

Hempacco also has timing on its side, as it’s the first hemp cigarette on the market. And it’s planning to provide vending machine kiosks for its products.

Moreover, Hempacco is going to use white-labelling with various brands to its advantage. White labelling is when a company purchases another company’s services or products and presents them as their own under their brand name. And Hempacco is working with many brands to provide shelf-ready products.

Therefore, you may want to keep a close eye on the HPCO IPO over the coming months. This is a company with a unique product that is targeting one of the largest and most controversial industries in the world. It’s sure to raise some eyebrows throughout the process.

Investing in IPOs

Are you an IPO investor? If so, you know how much time and effort it takes to fully research a company before its debut. Therefore, consider signing up for one of the best investment newsletters that does this research for you. These market experts dig deep into company financials and news cycles to help you better understand each and every investment opportunity.

The Hempacco IPO is gaining traction and will likely face high volatility in its first few weeks on the Nasdaq. To make better investment decisions, bookmark this stock and keep a close eye on its movement. The HPCO IPO may be the right investment for your portfolio. However, there’s always a lot to consider before jumping into a new stock offering.

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Innovative Industrial Properties is a cannabis REIT. The company buys properties and then rents them to licensed operators. In fact, IIPR was the first public company on the NYSE to provide real estate to cannabis companies.

Although IIPR stock has lost more than half its value this year, the company is expanding quickly. For example, in 2021, it bought 37 new properties.

A shifting opinion on cannabis use is helping the market build momentum. With more states planning to legalize it soon, experts believe it will continue. Is it time to buy with IIPR stock hitting a new 52-week low?

Here are a few reasons to watch Innovative Industrial Properties stock while it’s down.

No. 4 Growing Interest in Cannabis

Over the past few years, the public view of cannabis has changed greatly. For one thing, cannabis-based medicines treat several conditions like seizures or anxiety.

Furthermore, policy changes are creating a better image for the plant. Here are a few facts to illustrate.

• A 2021 poll from Gallup shows a record 68% of Americans support legal marijuana.
• A survey from the PEW Research Center shows that 91% of U.S adults support cannabis use.
• Cannabis sales climbed 30% last year, outpacing coffee giant Starbucks (NYSE: SBUX).

In comparison, in 2003, more than 60% of Americans were against it. And the momentum is expected to speed up in the next few years.

U.S cannabis sales expect to reach $46B by 2026, 91% growth from 2020. Not to mention all 50 states expect to have medical cannabis by 2025.

Currently, 37 states, including Washington D.C, have laws allowing medical cannabis. Additionally, another 18 have fully-legal cannabis. With this in mind, the company is taking full advantage of the booming market.

For example, in the past two years, IIPR has grown its number of properties by 65%. On top of this, it has expanded into two more states, gaining six new tenants.

Most importantly, the company has the formula to continue building momentum.

No. 3 Innovative Industrial Properties Has an Advantage

The cannabis real estate business is not as easy as it may look. For one thing, it can be expensive. You need special lighting and equipment. Not to mention raising funds for the industry is still illegal since federal laws prohibit it.

But, IIPR has a way around it. To explain, the company buys properties with state-licensed operators leasing the buildings.

Then, the cannabis REIT leases back the real estate. As a result, cannabis companies can use the funds to expand and create higher returns in the long run. Moreover, it creates a steady revenue source.

The company generally works with 15- to 20-year initial leases. Before IIPR buys a building, they first make sure it passes all the licensing, zoning and regulatory hurdles.

And lastly, IIPR uses triple-net leases. In this type of lease, tenants are responsible for property costs such as repairs, maintenance and taxes.

No. 2 IIPR Stock Is Down 60% From Its Highs Despite Growth

After gaining over 600% from its pandemic lows, IIPR stock reached an all-time high above $288 per share. But, since then, IIPR stock price has slipped 55%.

At the same time, the company is growing rapidly. Innovative generated $64.5M in the first quarter, a 50% increase from last year. Net income also rose 36%, reaching $34.7M, or 1.32 EPS.

Yet the biggest storyline continues to be the company’s growth rate. The company bought 37 buildings last year and another six in 2022.

Meanwhile, the most recent comes as IIPR buys a property in Texas. The company, Texas Original, is one of the only state-licensed companies operating in Texas. With this in mind, the cannabis company expects to control a large part of the market.

So far, IIPR is doing a great job positioning itself for future growth in big market areas. On top of this, it works with some of the top businesses in the industry.

No. 1 Working With Top Cannabis Companies

IIPR is building a portfolio of top-tier tenants. For example, the company’s top ten clients by investment include:

• PharmaCann – 12.4%
• Parallel – 9.6%
• Ascend Wellness – 9.4%
• Kings Garden – 7.4%
• Columbia Care – 7%
• Trulieve – 6.7%
• Green Thumb – 5.7%
• Cresco Labs – 5.7%
• Holistic Industries – 5.7%
• Curaleaf – 5.1%

The top ten clients make up 75% of the company’s revenue. Some companies are public, others are private, and all (excluding Kings Garden) are in over five states.

In fact, the cannabis REIT has properties across 19 states, with Pennsylvania, Michigan and Illinois making up the majority. In fourth is California, the largest legal marijuana market in the world.

IIPR Stock Forecast: What to Expect

If you are reading this far, you are about to get to the best part. IIPR stock is also a high-yield dividend stock.

Investors can earn a massive 6.46% yield with IIPR stock currently. After raising the payout this past quarter, IIPR pays a quarterly dividend of $1.75. In other words, you earn $7 annually for holding IIPR stock.

As the cannabis industry continues growing, IIPR is taking advantage. Providing real estate and funding can help stimulate the companies they lease to.

Additionally, investing in cannabis companies often comes with varying earnings and strong competition. IIPR offers another way to invest in the growth. With steady revenue and a generous dividend, IIPR stock is a unique marijuana play.

Between shifting public opinion of cannabis and limited access to capital IIPR stock is a REIT you will want on your watchlist this year. Look for the company to continue riding the cannabis wave as the market builds momentum over the next few years.

The post IIPR Stock: Why You Should Be Watching This Cannabis REIT appeared first on Investment U.

Sundial Growers stock is a Canadian cannabis company. It’s a vertically-integrated cannabis company. This means they’re involved in all aspects of the cannabis business from seed to sale. The company’s main offerings include dried cannabis, cannabis oils, and pre-rolled joints. Sundial Growers (Nasdaq: SNDL) also had a presence in the U.K. hemp market. They did this through their subsidiary, Sundial Bridge Farm Inc. And recently, they were able to sell this great asset. Keep reading for an in-depth analysis of Sundial Growers stock forecast.

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Hexo Stock Fundamental Analysis

Remember how I had very little to say about Tilray which was positive? Well, dear reader, you’ll find that the situation is even worse for Hexo. This stock has missed on earnings expectations on each of the last 4. One of them, their most recent, was egregious. The company was expected to announce a loss of five cents per share. Instead Hexo announced a loss of $1.53 per share. Now, there’s one massive problem that should jump out at you immediately. Hexo is a penny stock. It currently trades below 63 cents. To announce a $550 million loss, when the company’s total market cap is currently under $300 million, is egregious.

Fundamentally, there is little reason to be excited about Hexo stock. Revenue has increased every financial year going back to 2017, up 26x between 2018 and 2021. That’s it, that’s the most positive piece of quantitative information I have for you. What are the levels of revenue I hear you asking? In 2017 the company had revenue(s) totaling $3.8 million. In 2021, the company had $99 million dollars in revenue. Perhaps the other positive is that last year, revenue was higher than net losses? Last year the company reported net losses of $92 million, compared to [total] revenue of $99 million. In 2020, the company reported net losses of $408 million, compared to $60 million in revenue. The year prior Hexo reported net losses of $53 million, compared to revenue of $36 million. As I said, little reason for quantitative positivity.

Forward Thinking

Looking forward, the company hopes to be “cash flow positive” within the next 12 months. Wall Street doesn’t expect them to be profitable for years. Every projection, through 2025, is negative. While it’s understandable that the head(s) of a company will say good things about their company, you hope the statements are at least reasonably substantiated.

As it pertains to the news of its alliance with Tilray, not much good was said about it. Just looking at a few articles from the past few weeks, there seems to be little retail optimism. From this article, saying Tilray was making a mistake, to one that said Hexo stock simply had too many risks. In addition, there have been a total of four price targets placed this year. Only one had a positive weight attached to Hexo stock, the rest were neutral. The price targets were between 53 and 90 cents. So, a downside of almost 20%, and an upside of almost 50%.

On April 29, 2019, Hexo stock hit 33.12. It has ridden the wave down ever since. If you would have bought Hexo stock on that day, you would be down over 98%. In general terms, this is also a very valuable lesson in FOMO. Never chase stocks that are doing unreasonably well, and that are already experiencing parabolic run ups. Better to wonder about potential gains than worry about/grieve actual losses.

Technical Analysis

Unlike Tilray, Hexo stock is down year to date, and underperforming the market too. Hexo stock is down 11.28% on the month and 10.24% on the week. However, the stock is up 14.44% on the month. Take that price action as you will, as it seems par for the course with Hexo stock. Technical indicators are all broadly negative. Whereas Tilray had some time periods that were neutral, all time periods for Hexo flash either a Sell or Strong sell signal. The oscillators are more neutral than the moving averages, but not by much. I can’t even state that there has been a recent positive movement. Hexo stock has been down every day this week, and back to last Friday, March 25.

Drawing in lines of support and resistance on the 3-month chart, there seems to be an ascending channel. Support seems to be around 58 cents, roughly 4 cents from where the stock is now. Resistance seems to be around 82 cents, 20 cents above where the stock is now. Given recent price action, and support/resistance levels, it seems reasonable to think Hexo will continue its trend. If it hits 58 cents in the next trading session or two, it might begin its reversal towards 82 cents. However, that might simply be an optimistic reading of the charts, so I encourage you to do your own charting.

Conclusions on Hexo Stock

Outside of being a pure technical play, there is little reason for optimism for Hexo stock. That is, of course, assuming perceived support and resistance levels hold. On a purely quantitative basis, there is no reason to invest in Hexo stock right now. Until the company can report a single positive earnings surprise, I would hold out on positive forward-looking statements. If you choose to invest in Hexo, do so with extreme caution.

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Still in its fledgling stages as an emerging industry, cannabis stocks are ripe for the picking at their current valuations. There are no truly dominant players in the sector, despite legal cannabis across Canada and in an increasing number of countries around the world. There are, however, a pack of Canadian cannabis stocks primed for growth as the industry continues to develop. 

For investors patient enough to hold during the infancy of the cannabis market, there’s future profitability lurking in several contenders. Here’s a look at five cannabis companies in Canada worth investing in now, even amidst market uncertainties.

1. Canopy Growth Corporation (NASDAQ: CGC)

The largest public cannabis company in the country, Canopy Growth Corporation has been the name to watch since legalization swept through Canada. The company has a market cap of $3.52 billion (CAD), well-earned by increasing revenues year over year since 2017. Canopy pulled in $546.65 million in revenue in 2021 through an ever-expanding range of consumer product lines spanning vapes, edibles, concentrates, topicals and more. 

The company remains unprofitable in 2022 but is making great strides towards buttoning up its operations. For starters, Canopy was able to reduce its total operating expenses to $160 million in 2021, down significantly from $578 million in 2020. As it cleans up its balance sheet, the company is also looking forward to the prospect of federal legalization in the United States, and is already forming partnerships to capture market share if and when that time comes. 

2. Cronos Group Inc. (NASDAQ: CRON)

The other billion-dollar-plus player in Canada’s cannabis sector is Cronos Group (market cap of $1.73 billion CAD). While about half the size of Canopy Growth Corporation, this company presents investors with significant opportunity as the de-facto number two choice in the industry. Specifically, Cronos is extremely active in monetizing a broad range of marketable cannabinoids, including CBD, CBG and THC.

Cronos carries virtually no debt load and is primed to begin translating revenue to profit in short order. This is further bolstered by the company’s fourth quarter consolidated net sales, which were up an impressive 51% from the prior-year period. Moreover, while the company faces falling U.S. revenues (-11%), its worldwide sales are up significantly (+68%). In particular, Cronos enjoys a burgeoning presence in Canadian recreational and Israeli medical cannabis markets.

3. Aurora Cannabis (NASDAQ: ACB)

On the cusp of joining the billion-dollar market cap club (market cap of $985.81 million CAD), Aurora Cannabis has faced recent headwinds that leave it lagging just behind the other major players on this list. In February 2020, the company’s co-Founder and CEO resigned, prompting an executive search to fill the void. Prior, the company undertook an aggressive expansion campaign that included a series of acquisitions, which left its balance sheet encumbered.

The good news for Aurora is that the turbulence appears mostly behind it. The company generated $230.50 million in sales in 2021 and stands poised to post a profit within the next year. The company’s acquisition strategy is also paying dividends as it controls a significant stake of the recreational cannabis market in Canada and Europe. This is largely thanks to its subsidiary Pedanios GmbH, the EU’s largest distributor of cannabis by volume of product sold.

4. OrganiGram Holdings (NASDAQ: OGI)

One of several minor players in the Canadian cannabis market, OrganiGram Holdings enjoys a market cap of $614.80 million CAD. And while the company has underperformed in recent years, its current standing in the market suggests that it’s ready to break out and join the major players in the years to come. 

There are several important indicators for OrganiGram’s impending breakout. For starters, the company has virtually no debt. It also has increasing sales, up 66.80% over the past five years, culminating in $90.20M in 2021. In December 2021, the company also acquired Quebec’s Laurentian Organic, a producer of high-end cannabis consumables, putting it on-track to directly compete with some of the subsidiary brands of the major Canadian cannabis companies. It’s a sign that OrganiGram is ready to blossom. 

5. The Hexo Corporation (NASDAQ: HEXO)

Investors looking for a sneaky play among Canadian cannabis stocks will find it in The Hexo Corporation. The company only has a market cap of $290.53 million CAD, largely due to the fact that its shares have plummeted more than 90% in the last 12 months. Despite this, there’s more to Hexo than meets the eye. 

The most enticing aspect of this company is its impressive $144.50M in sales, up 131.20% over the last five years. These figures put it on a trajectory to compete with companies more than 10x its size. Its growth is undeniable, as well. Hexo has seen a 131.20% increase in sales over the past five years. Perhaps most intriguing of all, however, is the company’s relationship with Tilray Inc. (NASDAQ: TLRY). Tilray recently purchased $211 million of Hexo’s debt as part of a strategic alliance. It’s a move that could result in M&A activity down the line. 

Buy and Hold as the Canadian Cannabis Market Grows

On the surface, Canadian cannabis stocks haven’t wowed investors in 2022. Yet, probe deeper and there’s a wealth of potential waiting for investors willing to buy and hold while the industry matures. If you’re intent to buy and hold, these five stocks are more than likely to return significant value as the industry takes shape and grows.

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There are more people turning to cannabis and hemp-based products for medical purposes. This will likely continue. And it will create mass adoption of the plant for recreational uses.

It isn’t insane to think that someday, cannabis could become as common as alcohol. So, since cannabis can give us all kinds of different products, it’s the logical answer. Plus, there are more millionaires now than there ever were. A greater amount of people with higher wealth. That means more cash flowing to recreational industries. It’s ‘new and exciting.’

And, marijuana can become addictive. Which is another point to keep in mind. It’s likely to become more widely accepted over time. And, it will probably take a similar route as liquor or cigarettes.

And when I say that, I mean, socially and economically. In the 1900’s, liquor and cigarettes were considered ‘cool.’ For liquor, there was an “underground” system. Marijuana did also. It still does in some areas.

Then, alcohol bans lifted. Much like cannabis is going through now. While people still partake in liquor and cigarettes, the industry has slowed substantially. But, there are still many profits to be had in both.

For investors, the potential returns for cannabis are insane. And as far as Sundial Growers stock goes, stock prices aren’t great. But, with time, they’ll likely increase.

About Sundial Growers Stock

Sundial Growers is a cannabis company with a market cap of over $1 billion. They provide edibles, smoking products, tinctures, and more. Creams and vape products are also included in that list.

The Sundial website’s divided up into several different categories. And those categories include Calm, Ease, Flow, Lift and Spark. That, along with the use of many colors on the website is a great use of marketing.

And that’s the thing that sticks out to me with Sundial Growers stock.

They are very strategic with their marketing. The customer experience flows and gets the customer excited about the products.

Plus, they position them to be very high quality.

They put a great focus on making sure their crops and plants are well cared for and maintained. Controlling the amount of light, water, and food each plant gets is in their regimen.

And, such controlled structure helps very much when franchising. That’s one of the main keys to success for McDonald’s.

And Sundial owns several different brands. These include Sundial (of course), Palmetto, Grasslands and Topleaf. Each of these brands has a different place in the market. They each serve a different type of customer.

Stock News

Sundial Growers stock has recently reestablished it strategy. It sold lots of new stock in 2021, paid off all its debt, and made over one billion dollars. They began buying up competitors, too.

Alcanna was one of those companies. It’s a liquor store operator with weed stores. And Sundial purchased Inner Spirit in 2021.

So, the next step is to put these brands to work for them.

How Is Sundial Growers Doing as a Company?

Sundial Growers stock has all the major corporate filings accessible on its website. That’s a great sign. Because it shows they are serious about the growth of the company for the long-term outlook.

The corporate presentation looks very persuasive. The company focuses on vape products. The leadership includes high performers, too. Leaders from companies like Mars, Molson Coors and Kellogg’s.

On its financial statement, the assets to liability ratio is phenomenal. Liabilities are in the lower tens of thousands. And assets? They are in the upper hundreds of thousands.

Governance of Sundial Growers stock, as I said above, is fantastic. The company has brought on people who have success in their fields. And those fields are quite relevant to the cannabis industry. And what Sundial aims to do. Which to be mass production and becoming the largest company on the market.

Also in 2021, Sundial offered loans to other cannabis companies. This shows a strong financial position in the market. But, it also shows they may be getting a feel for how other companies are doing, too. And, there may possibly be some more acquisitions in the future.

Stock Forecast 2025

Sundial Growers stock is headed in the right direction. As far as the bear in the stock chart, it’s likely to be temporary. New lows will hit if they haven’t already. Then, the stock could begin climbing again.

Plus, it seems that investors haven’t quite caught on to Sundial’s profitability yet. Soon, they will. And then stock could begin to rise. For the long-term, I predict Sundial to be a great investment. I can’t promise any specific numbers for 2025.

But, the financial statements are positive. The way Sundial Growers stock rebounded in 2021 shows how adaptable they can be. And who knows how high their profitability will go in the future.

Just like any other newer market, profitability will decrease over time.

And it will happen for Sundial. But, I don’t see that happening anytime soon. I imagine it will take at least another decade. Especially since Sundial is buying up many of its competitors.

The fact that they’re in a controversial industry is an advantage for investors. And it will likely reward those who are paying attention.

Buying stock in a controversial, yet inevitable market? That’s smart. Even if the industry goes against your morals, there’s money to be had.

Should I Buy Sundial Growers Stock?

I can’t tell you that. If you love cannabis, then I would say this is a great stock for you. If you don’t? Then, you should do some more digging to make sure this is something you want to contribute to.

The cannabis industry will keep growing for a while. And it seems obvious there is money to be had, too.

But, as an investor, it is usually best to stay away from companies you don’t believe in.

And that can be perceived in different ways, too. Maybe you did some due diligence. And you believe the company will do well, but you don’t like what they are doing.

Maybe you believe the company won’t do well, based on your due diligence. Even though they are in a market you love.

The main thing is to trade and invest what you’re comfortable with.

Go check out more of Sundial Growers stock. Decide on whether you want to invest or not, and tell me about your decision in the comments!

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If this question has ever crossed your mind then you might have taken a look at Aurora Cannabis (Nasdaq: ACB) as a potential candidate. Aurora Cannabis is currently the eighth largest cannabis company in the world by market capitalization. It’s ranked behind the U.S. marijuana companies Curaleaf, Green Thumb Industries, Trulieve Industries and WM Technologies. It’s also ranked behind fellow Canadian companies Canopy Growth Corporation, Cronos and Sundial Growers.

At its biggest, Aurora Cannabis had eight production facilities, five sales licenses and operations in 25 countries. In some years, its stock has soared. In others, it has dropped like a rock.

So, where does Aurora Cannabis stock stand today? Is it worth adding to your portfolio? Let’s take a quick look at an Aurora Cannabis stock forecast and find out.

Aurora Cannabis Stock Forecast

NOTE: I’m not a financial advisor and am just offering my own research and commentary. Please do your own due diligence before making any investment decisions.

Cannabis Marijuana Industry Update

The excitement behind marijuana companies has been bubbling for years. In fact, Aurora Cannabis was actually founded in 2006 which was over a decade before Canada legalized the retail sale of Cannabis in 2018. However, actual results across the marijuana industry have mostly fallen flat.

While selling marijuana legally sounds like a money-printing machine, the machine has been known to jam occasionally. To name just a few industry roadblocks, retail stores have been slow to roll out in Canada, vaping-related illnesses have become fairly common, there’s been an oversupply of commercial cannabis, and there’s been a general lack of profitability from cannabis producers.

Also, Aurora operates mainly in Canada where the market for cannabis sales is smaller. The U.S. market is much larger and represents 80% of the global market. Unfortunately, despite being geographically close, Aurora Cannabis doesn’t have a strong foothold in the U.S. market.

Due to the risk factors listed above, shares of marijuana stocks tend to be volatile. Aurora Cannabis stock is no exception.

Let’s take a closer look at an Aurora Cannabis stock prediction…

Aurora Cannabis Stock Prediction

 Since going public in 2017, Aurora Cannabis has been a roller coaster. For the two-year period from 2018-2020, the cannabis stock saw its price shoot from $30 to $100 per share and then back down three separate times. This means that two investors could have bought Aurora Cannabis stock just a few months apart but had shockingly different returns.

Since its last big peak in early 2019, Aurora Cannabis has lost approximately 95% of its value. Part of the reason for this decline is that it posted an impressive $3.28 billion loss in 2020 on revenues of just $278 million. It simply has too much overhead and not enough revenue coming in.

Another risk factor to point out is that Aurora has come dangerously close to running out of money several times. To stay afloat, it’s resorted to diluting its stock. This is usually not a good sign because it means that it was unable to raise money through other methods. This can be a sign that investors don’t have faith in its business. In May 2020, it initiated a 1-for-12 reverse stock split. Its stock hovered below $1 for so long that it was at risk of being delisted from the exchange.

It’s safe to say that things have probably been stressful at ACB headquarters. So what is management’s plan to right the ship? Here’s the Aurora Cannabis stock forecast looking forward.

ACB Stock Forecast

One of the biggest changes that Aurora Cannabis has made is by finding a new CEO in Miguel Martin. Miguel has been the CCO for Aurora since early 2020 and was also the CEO of Reliva, which Aurora acquired in mid-2020. So far, one of Miguel Martin’s biggest initiatives has been to cut costs.

He’s sought to do this by closing several of its Canadian production sites to reduce its fixed asset footprint. He has also outsourced its sales team and is shifting the company’s focus to its highest-growth, highest-margin product categories. While announcing this new strategy, he reportedly shook his fist and exclaimed, “I want our margins to be higher than our customers!” (NOTE: He didn’t actually say this, but he should have).

While these cost-cutting measures will allow Aurora Cannabis to tread water for a little while longer, eventually it’ll need to improve sales. One of the ways that it’s hoping to do this is through its acquisition of Reliva, which mainly operates in the United States. After this acquisition, Interim CEO Michael Singer said…

The partnership between Aurora and Reliva is expected to create a market-leading international cannabinoid platform that we believe can deliver robust revenue and profitable growth.

Since Miguel Martin is the former CEO of Reliva, he should already have a good idea of how these two companies can combine forces to achieve profitability.

Aurora Cannabis is expected to announce its earnings on September 21, 2021. Analysts are expecting earnings per share of -$0.28 and revenue of $56.99 million. That would be a slight increase from its previous quarter, where it reported revenue of $55.16 million.

Keep in mind that Aurora Cannabis has missed four of its last four earnings per share expectations. Last quarter, it missed this metric by 40%.

September 21, 2021, will also be the one-year anniversary of Miguel Martin taking the helm. Whether or not this has been enough time for his initiatives to show up in Aurora’s financials is another story. Through its initiatives to cut costs and increase U.S. sales, it seems to be heading in the right direction.

However, it’s important to remember that investor expectations play a big role in a company’s short-term stock price. It doesn’t necessarily matter how much money it reports for earning on the 21st. What matters is how these earnings compare to the expectations set by investors. In particular, cannabis stocks seem to live and die by investor expectations. A small wind of good news can spread through Wall Street like wildfire. On the other hand, another earnings miss could mean that investors won’t go near Aurora Cannabis stock for another year.

Either way, it’ll be exciting to see what the future holds for Aurora Cannabis.

I hope that you’ve found this Aurora Cannabis stock forecast to be valuable in determining whether Aurora Cannabis is a good stock to buy! As usual, all investment decisions should be based on your own due diligence and risk tolerance.

Aurora also made our list of cheap marijuana stocks to buy. Feel free to check that out and also sign up for Profit Trends below. It’s a free e-letter that’s packed with investing tips and tricks. You’ll find some of the best investment trends to profit on.

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