The best pot stocks to buy in January 2020

Published Jan 23, 2020 10:00 a.m. ET
iStock / Darren415

It's the new year 2020 and the cannabis industry is exceptionally well primed for more exciting and profitable times ahead. So, as most cannabis stocks investors say goodbye and good riddance to the year 2019, let us check what the past year held for us.

The year was disappointing, persistent supply issues in Canada, and a resilient illicit market throughout North America made sure that the year 2019 was not the golden egg the investors were expecting. However, it is 2020, and the big question is, what are the best stocks to buy now, which stocks should we invest in so we can take advantage of the green rush?

KushCo

Let’s look at a top pick from last year that had a few issues due to some of the prior mentioned problems. The company, KushCo, sells vaporizers along with branding solutions and provides packaging solutions and supplies hydrocarbon gases, that are needed to produce cannabis oils.

Although these were staggering issues and problems, this company remains a formidable pick for January stocks.

  • The company has innovation, the launching of low-capital and high margin initiatives. Some of these include a hemp-trading business. This service will connect verified buyers with the network sellers of hemp commodities. Predicted at least 10% of the company’s 2020 sales are likely to be derived from this hemp trading operation. It is a positive step for the company as it requires no capital input.

  • Between the end of the first quarter and fourth quarter, the company raised its gross margin from 13% to 20%. Although less than the projected amount, it is beginning to pay off. The projection from Wall Street is that regularly the company will be profitable in 2020.

  • The company did not miss its sales projections, as many other companies did. The company has doubled its sales; this was accomplished in four consecutive years and included 186% sales growth in 2019. The company is forecasting $240 million in yearly sales for 2020, representing a 61% year over year growth.

Organigram Holdings

Located in an Atlantic province, this company is unique. It is the only major grower that has a peak production potential of a yearly yield producing 100,000 kilos of the Cannabis. This company can do well in the Atlantic provinces where the population is lower, but the cannabis-using rate is higher than the national average. Interestingly this company is one of five that has supply deals with every Canadian province.

  • The companies third fiscal quarter had net sales that outpaced the operating expenses by 1.17 million Canadian dollars.

  • This company is the only Canadian grower that has produced a no-nonsense profit. The profit was not significant, but it is the first real operating profit described in the legal marijuana market.

Innovative Industrial Properties

  • This company was one of the brightest spots in the cannabis investment space for 2019.

  • The acquiring of company assets for the growing and the processing of medical marijuana is also then transferred into extended property leases. This enables income from rental properties. The ability to increase the rents yearly and the 1.5 property management fees will allow the company to stay ahead of the curve of inflation.

  • 2019 saw the company almost quadruple its portfolio from 11 to 42 properties in 13 states

  • It's the only pure-play cannabis stock that rewards its investors with a dividend. The company payout of $1 is 567% higher than the amount the company paid out to its shareholders nine quarters ago.

The issues that plagued the cannabis industry in 2019 will not be solved overnight. However, the cannabis companies mentioned above look towards a more cost-focused sector. They will be taking the necessary steps in 2020 to ensure a better year for the 2020 pot stocks for cannabis investors.

Cannabis stocks values have dropped but is there an end in sight

Author

Related posts