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Chart of the Day / Why We’re Incredibly Bullish on Marijuana Stocks

Why We’re Incredibly Bullish on Marijuana Stocks

February 19, 2019

With bills floating in Congress, Canadian legalization in the pocket, U.S. states legalizing, supply issues, and interest from the corporate world, the last thing you want to do is miss the marijuana stock boom.  We’re talking about a market where sales are expected to rise 38% just this year to $16.9 billion, according to Arcview Market Research and BDS Analytics.

That’s not exactly something to ignore.

For an idea of just how powerful those catalysts have been, take a look at Canopy Growth’s (NYSE:CGC) earnings.

While CGC did post a loss of C$0.38, as compared to expectations for a loss of C$0.16, investors are already drooling over the company’s net sales of C$83 million ($625 million) – a 283% jump year over year from C$21.7 million.  Analysts had only anticipated C$81.1 million, almost $2 lower than expected.

That’s only like to grow with further legalization and an incredible amount of likely demand.

Plus, the company quadrupled its sales volume, which soared to 10,100 kg. year over year from 2,330.  “Our successful first full quarter with recreational sales in Canada reinforces our long-held strategy of making meaningful investments early in order to secure market share,” according to co-CEO Bruce Linton.

We must also consider that Canopy’s U.S. growth strategy is on track.

Most recently, the company announced it would make a significant investment of $100 million and $150 million to create a large-scale hemp production facility in New York over the next 100 days. It’s currently looking at sites in the Southern Tier of the state, notes Bloomberg.

But that’s just the start.  According to Linton, by the fourth quarter, there will be a “lot more stores” and “a lot more products in the Canadian recreational market. He’s also anticipating for Canopy Growth to “dominate” the market, as well.

No wonder investors sent the stock screaming higher.

With so many opportunities ahead, smart investors can clearly see the potential that marijuana has in store for smart investors.