These cannabis stock values are primed to rise in 2020

Published Apr 16, 2020 12:00 p.m. ET
iStock / Darren415

Nothing quite like what the world is experiencing today has happened since 1918. The global economy has come to a screeching halt, and this is reflected in the state of the global stock market.  COVID-19 is the reason that stocks have lost ground. Some of the stocks that are particularly hurt by the devastating global pandemic of 2020 are the cannabis stocks.

Which stocks to buy

The world's top experts have predicted that the enforcing of social distancing is the correct step to be taking, and they’ve said that we could be seeing greener skies perhaps in May, but unfortunately, the COVID-19 pandemic will leave some terribly beaten-up stocks in its path. Sad as it is, this is the time for looking at which stocks to buy.

As the virus disappears, revenue trends will begin to improve. The stores will open back up, and new products will be presented for the cannabis consumer to purchase once again. The later part of 2020 will be when cannabis investors see the big bud rebounds of their cannabis stocks, and these are some of the better stocks to buy:

1. Aphria (NYSE: APHA)

This company has had its struggles, and this could be due to the companies second-quarter numbers in January that seemed to miss across the board. Terrible headway happened for this stock in early 2020, and then the Coronavirus hit. To date, the position of this stock is down 50% to date. Looking ahead and hoping that the Coronavirus passes quickly within the next couple of months, Aphria stocks should get back on track. Volume growth and revenue should accelerate, and the Aphria stocks will rebound in the second part of 2020.

2. Aurora Cannabis (NYSE: ACB)

As the second biggest cannabis player within the Canadian cannabis space, Aurora cannabis fits snuggly behind Canopy Growth. Troubles arose when investors had concerns over the companies balance sheets and their liquidity. The company displays the worst balance sheets in the cannabis sector while having a huge cash-burning issue, and COVID-19 has not helped the situation. This stock has found itself with concerns that have only presented themselves as larger and more profound.

Layoffs and reduced production capacity, along with restructuring their balance sheets and other issues, is how management is fixing the problems that have plagued this cannabis company. Looking forward, the changes can be positive, and when the demands rebound, back will come the profitability and much larger cash flow for the later part of 2020. Let's hope that Aurora stocks can hold on through the devastating COVID-19 virus that ripped the life from the second biggest Canadian cannabis player in the first part of the year.


3. Canopy Growth (NYSE: CGC)

Deemed as the market's largest and perhaps most important company, this stock looks set for big things to happen in the latter part of 2020. Investors can foresee three main reasons for the light to look greener for this company a bit later in the year.

  • The company has enough cash to withstand the deadly virus repercussions that are expected
  • The company has momentum coming into the virus crisis and will hold and keep moving
  • Post virus huge momentum will be seen in the aggressive opening of retail stores

So keep an eye out, and you will see promise for this cannabis stock in the back half of the year.

4. Cronos (NASDAQ: CRON)

Look at this stock as another one of the best cannabis stocks to invest in as the second half rebound takes over. The cash resourced balance sheet allows this stock to ride the impact of COVID-19. Insolvency is not in the vocabulary of this company any time soon. Once the virus is over, the large cash recourses will be available for Cronos to capitalize on the Canadian demand for cannabis in the second half of 2020. The green path will be paved for the next quarters, and Cronos will weather the dreaded COVID-19.

5. OrganiGram

This company has been able to profitably secure a presence in one of Eastern Canada’s Atlantic provinces, and they have secured a spot in New Brunswick where the headquarters are located in Prince Edward Island, Nova Scotia, and Newfoundland. Reports have indicated that these provinces have a higher per capita for consuming cannabis when compared to the national average. Putting this company in the spotlight as a profitable purchase of stocks post-COVID-19 is the companies profitable multi-tiered production facility that allows the company to grow more weed per square foot when compared to the industry average. Look for a bright future with this stock post virus disaster times.

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