Marijuana stocks to avoid or sell in March and April of 2020

Published Mar 27, 2020 09:00 a.m. ET
iStock / panida wijitpanya

Supply issues and regulatory concerns have plagued the cannabis industry, and 2020 has not given the best start for some of the top marijuana stocks. Cannabis news has reported red, not green outlooks for some of the most popular marijuana stock options available. The following are perhaps some of the best marijuana stocks to avoid. Here are what can be called the losers within the green market stock purchase packages.

HEXO

The Quebec based grower is one of the green stocks to avoid this month. The reduction of 200 staff members has caused the standstill production in the Niagara facility along with the 200,000 square foot space in the flagship Gatineau facility. Some severe cash flow issues plague HEXO.

The ongoing operating expenses and debt payments are becoming uncoverable as they become due. The share price fell within $0.11 of the minimum share price of one dollar. The minimum share price is required to remain on the listings of the New York Stock Exchange. The future listing on the NYSE seems shaky for this company.

Aurora

Some may look upon this stock as one of the most popular marijuana stocks in the world. This may be a more widespread opinion of the millennium investors. However, the dream or perceived dream of the position that Aurora holds has been overshadowed by numerous operational issues. The supply issues which affected all of Canada were no different for the folks at Aurora. Off red coloured flags were noticed when the company cancelled the construction of two of the largest cultivation farms. One of the farms is in Alberta, and one is in Denmark.

The company has recently put the one-million-square-foot greenhouse located in Exeter back on the market for a mere Canadian $17 million. The company also has the burden of a lack of cash, which may mean that Aurora is not able to meet the obligations attached to the company. These concerns indicate that this is not a marijuana stock that you want to have in your portfolio anytime soon. Marijuana stocks such as these may be best sold.

TILRAY

This is another Canadian marijuana stock that should be avoided if you are looking for a stable marijuana stock to invest your money in. Based in British Columbia, Tilray has backpedaled while waiting for their product to move from the grower to the retailer. A 10% layoff within the workforce starts the red flag waving that means there are some concerns in the company. Tilray states that this move is part of the restructuring that is necessary, and may continue throughout 2020 to reduce expenses.

A cash shortage is noted in Tiray’s cash drawer. Tilray’s attempts to burst into the green US market has not moved as expected and planned. The distribution of CBD by Tilray throughout the states has been, to say the least, disappointing for the company. Another reason to defiantly avoid purchasing Tilray marijuana stocks in March is the doubt that has been cast upon the company from the US Food and Drug Administration regarding the safety of CBD.

So, cannabis news indicates that as we move forward in the crazy green marijuana stock world, we know that as long as there are winners in this green space, there will also losers.

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