The cannabis industry has been set back quite a way since the advent of the coronavirus. Although we have seen short periods where marijuana stocks see gains, the majority of marijuana stocks in the industry have taken big losses. While the coronavirus is a majority of the blame for the recent volatility, the cannabis industry on its own has some major challenges to overcome. Included in this is everything from regulatory setbacks to the increasing size of the black market.
Although there are some challenges, it looks like the pandemic we are in could be a reset button for the cannabis industry as a whole. After the major market losses taken at the end of last year, investors believed that pot stocks would begin to rebound. Entering into January, this looked like it would be the case. But, the coronavirus has hurt all industries around the world and not just cannabis.
The market itself has remained quite resilient. Investors are showing a lot of fear as prices are very volatile, but this fear is marked by small periods of growth and bullish gains. These gains are in no way a constant, and won’t be until the industry sees more stability. But, we are beginning to see some calming down as the public becomes more comfortable trading in a market struck with a pandemic. For now, however, these two pot stocks to watch continue to look very interesting.
A Major Marijuana Stock With an Interesting History
Aphria Inc. (APHA Stock Report) is one of the most popular pot stocks in the industry. Although it sits alongside other major Canadian marijuana producers which have underperformed, Aphria has actually shown some real potential. In the past four quarters, it has been able to post a profit 75% of the time. In addition to this, it has a large amount of free cash on hand which has been increasing alongside its profits. Some investors may be surprised to hear about a pot stock that has been producing a profit, but it is true.
The company is currently trading at around 2 times its sales which makes it quite an attractive bargain for investors to consider. In terms of it being a bargain, the company is also down more than 50% over the past twelve months. Much of this is due to market volatility and not so much the companies financial standing. But, it remains that Aphria is due for a rebound. Whether or not this potential rebound makes Aphria a pot stock to watch, is up to the individual investor.
Is This A Profitable Pot Stock
Trulieve Cannabis Corp. (TCNNF Stock Report) is one of the leading vertically integrated marijuana stocks to watch. The company has a more than heavy focus on the Florida market, which has shown a massive amount of potential in the last few years. Of the 48 dispensaries that it owns, 46 of those are in the Sunshine State. But, they have done this on purpose. The company sees Florida as one of the final frontiers for a massive recreational cannabis market. Although the state has had marijuana legal for medicinal patients, it has not done so for adult use.
In its most recent report, the company posted a profit of around $178 million. This number is on its sales amount of just over $250 million for the past twelve months. The company has accounted for fair value adjustments which do shift those numbers to look better, but regardless the company has quite a major income stream. With the company down 150% in its sales in the past year, it looks the coronavirus just could have made this company a cannabis stock to watch.