Obviously, now is a hard time to pick any pot stocks to buy. But, amidst the most recent volatility, comes a new strategy to use for the future of cannabis investing. Currently, the best strategy is simply to refine how we invest as there are several issues in the cannabis industry that make it difficult to make the right call. Amidst these issues are regulatory worries, supply issues, and the threat of the black market. All of this has occurred simultaneously alongside extreme selloffs from coronavirus related issues.
As a result of all of these factors, many of the most prominent marijuana stocks have reached lower levels than ever before. With this, however, comes a time when we can begin to search for value. Warren Buffett has stated that his investing strategy is to buy when prices are low, and then keep buying as they get lower. This seems to be quite true for pot stocks as future projections are not getting any lower.
Some estimates have shown that the cannabis market could reach anywhere from $50 to $100 billion in sales within the next ten years. Because of this, it looks like the market could begin to bounce back once all of the current worries subside. But, all current volatility aside, let’s take a look at these two pot stocks for their potential forward momentum.
The Big Name Pot Stock
Cronos Group (CRON Stock Report) is one of the largest pot stocks in the industry. The company has had quite a rough time over the past six months. During that time, it has shot down by as much as 60% in value. Recently, however, it has moved toward an extremely conservative business model that should allow it to have a better chance at growing in the next few years. What’s interesting is the amount of free cash that the company has.
After receiving a massive capital infusion from Altria (NYSE:MO) the company has since been working to acquire as many cannabis companies as it can. With this, it has moved toward researching and developing new products so that it can keep pace with the rest of the innovation going on in the market. Interestingly enough, the company also has a large partnership with Gingko Bioworks, which should allow it to take a step further into the alternative uses of cannabis for the future. Because of this, Cronos Group remains an interesting pot stock to keep on one’s radar.
A U.S. MSO Pot Stock
Cresco Labs (CRLBF Stock Report) (CL) is considered to be one of the largest MSOs in the industry. The company has found its niche in the MSO market as that is where it sees a large amount of growth occurring in the next few years. The company is also in the midst of acquiring Origin House, which should add an incredible amount of distribution to its pipeline. Many have stated that with this acquisition, the company could become the first pot stock to reach $1 billion in annual sales.
Of course, that number may seem a little bit farfetched as its market cap only sits around $1.1 billion right now. But, its growth prospects are quite intense considering its role in the Californian cannabis market. If it can continue to boost its presence across the U.S., the company has a great chance at becoming one of the largest pot stocks in the industry. Because of this, the company is definitely worth watching as we continue to keep an eye on pot stocks for the future.