High-Potential Marijuana Stocks
In an industry chock full of potential, it can be difficult parsing out which companies really do have the highest ceilings. After all, almost every major marijuana company has experienced one period or another of intense growth. But when it comes to the best high-potential marijuana stocks, the pot stocks on the Nasdaq may be the best situated to see huge gains—and also the most likely to suffer severe falls.
You see, the history of marijuana on the Nasdaq has been a short one. The first pure-play marijuana company to land on the ticker was Cronos Group Inc (NASDAQ:CRON) in the first half of 2018, back when marijuana stocks first began listing on major U.S. exchanges.
While most chose to list on the New York Stock Exchange (NYSE), a couple more pure-play marijuana stocks followed Cronos Group’s lead (the NYSE has since seen the majority of marijuana stocks choose it over the Nasdaq).
The first was Tilray Inc (NASDAQ:TLRY), which listed on the Nasdaq in July of 2018.
But there was one very important distinction between Tilray and Cronos: Tilray made its initial public offering (IPO) on the Nasdaq. CRON stock, by contrast, was added to the Nasdaq after having already been listed on Canadian exchanges. This has led to a radical difference in fates for the two companies, which I’ll elaborate on below.
Finally, we have the newest comer to the party, OrganiGram Holdings Inc (NASDAQ:OGI). Having just listed on the exchange, OrganiGram Holdings is the smallest company of the three by market cap; the company is less than a third the size of Tilray and only just a bit larger than a quarter of Cronos Group.
In fact, OGI stock is the first marijuana penny stock to list on the Nasdaq.
With these three stocks in mind, you have a complete picture of what the exchange has to offer when it comes to pure-play marijuana stocks (I keep mentioning “pure-play marijuana” because companies like GW Pharmaceuticals Inc [NASDAQ:GWPH] operate on the exchange in the marijuana space, but I wouldn’t categorize them as a strict marijuana stocks).
What’s important to remember about the Nasdaq is that it is traditionally known for holding tech stocks and other high volatility industries. We’ve seen that play out in the marijuana industry thus far, with CRON and TLRY stocks usually being more volatile compared to the NYSE rivals.
Increased volatility is, as always, a double-edged sword. The more extreme swings mean higher highs, but also lower lows.
As such, these three companies have arguably higher potential for short-term gains than others based on the history of marijuana stock performances on the Nasdaq.
But before we proclaim one of these companies superior to the other, we should evaluate each by its own merit.
Chart courtesy of StockCharts.com
TLRY Stock Prediction
As can be seen in the above chart, each Nasdaq stock has shared a very different path over the last year, although one thing they all share in common: big gains.
But one of the companies is clearly the outlier in that those gains were front-heavy, with it declining precipitously over the past year. That company is Tilray Inc.
When Tilray first landed on the Nasdaq, the IPO fervor was enough to jump-start trades into overdrive and send the company soaring, seeing as high as 1,000% gains in days.
But such a massive spike in value without much in the way of concrete support is bound to fail eventually, and that’s what we’ve seen now: a long, steady descent to what TLRY stock’s true valuation is.
Unfortunately, we’re still not there, and I anticipate further falls to come.
While there is potential within this company—it wouldn’t have risen so high in the first place if there was absolutely no promise—it will have a long way to climb before it can retake a position anywhere near its old high points.
As such, I would pass on TLRY stock, at least in the near term.
CRON Stock Prediction
The strongest performer on the exchange by far over the past year has been Cronos Group Inc.
Nearing 150% gains over the past year, the company was once one of the more unpredictable shares in the industry.
While its NYSE cohorts generally followed similar trends, CRON stock always seemed to go its own way, usually negative, until it scored a partnership with “Big Tobacco” by way of Altria Group Inc (NYSE:MO), makers of “Marlboro” cigarettes.
The billion-dollar deal sent share prices roaring upward with most of the gains coming to start 2019.
It was by far Cronos Group’s strongest move so far, and it’ll be interesting to see how it follows it up.
Meanwhile, the company’s numbers have been fairly strong in its financial reports, putting it in a good position to see gains for years to come yet. While I don’t think Cronos Group is in as strong of a position as, say, Canopy Growth Corp (NYSE:CGC), the company is still very impressive and will likely continue to yield gains for investors.
Now on to the youngest Nasdaq marijuana stock of the three, OrganiGram Holdings Inc.
OGI stock is new to the Nasdaq, sure, but I’ve been covering OGRMF stock for over a year, and the company has never failed to impress.
It has a strong price-to-earnings ratio that has long placed it among the few marijuana stocks considered to be undervalued.
Being a marijuana penny stock also means growth can come hard and fast, whether through a strong deal, an acquisition, or powerful numbers.
Its first quarterly report in 2019, in fact, was so strong that it sent many other marijuana stocks rising due to the massive growth in sales that came as a result of Canadian marijuana legalization.
Putting all that together makes OGI stock one of the most potential-laden companies in the industry.
I predicted that OrganiGram Holdings would hit a major exchange in 2019, and I was right. The company has seen huge growth so far in the year; I called that, too. I’ve been pretty accurate in my readings of OGI stock so far and I believe that the future will hold more gains for the company.
In fact, I believe that OrganiGram has probably the highest potential in the entire industry right now due to its size, its place on the Nasdaq, and its success so far.
While there’s no fundamental difference between the Nasdaq marijuana stocks and the NYSE marijuana stocks, there is a clear divide in their fortunes so far.
Far more volatile and riskier as a result, the Nasdaq marijuana stocks are high on potential for investors willing to stomach the added risk.
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