Thursday, February 01, 2024

Exploring the Leading Cannabis Stocks Set to Shine in the Fourth Quarter of 2023


Monitoring the pulse of the cannabis sector is made easier through the ETFMG Alternative Harvest ETF (MJ), encompassing key publicly listed cannabis stocks. However, this fund has witnessed a decline of over 43% in the past year, in stark contrast to the large-cap Russell 1000 Index, which marked an approximately 15% gain over the same period.

Exploring the Leading Cannabis Stocks Set to Shine in the Fourth Quarter of 2023

Reviewing the landscape, we delve into top cannabis stocks categorized by best value, highest growth, and best 12-month stock performance, all data accurate as of November 24, 2023.

Best Value Cannabis Stocks

Identified by their lowest 12-month trailing price-to-sales (P/S) ratio, these cannabis stocks signify the value investors attribute to each dollar of revenue.

  • SNDL Inc.: A Canadian company engaged in the production, distribution, and sale of cannabis products, reporting a 78% reduction in net loss for Q3 2023 and a 6% increase in total revenue.
  • Organigram Holdings Inc.: A Canadian firm known for producing and selling cannabis and related products. It recently announced a change in its chief financial officer role.
  • Aurora Cannabis Inc.: Based in Canada, Aurora is a producer, distributor, and wholesaler of cannabis products for medical and consumer use.
  • Tilray Brands Inc.: Involved in researching, cultivating, processing, and distributing medical cannabis products globally, Tilray Brands recently expanded its share of the U.S. craft beer market through an acquisition.

Advantages of Investing in Cannabis Stocks

Growth Potential: Despite recent underperformance, cannabis stocks present growth opportunities, with U.S. cannabis sales projected to surpass $33 billion in 2023 and reach nearly $57 billion by 2028, according to MJBizDaily.

Increasing Acceptance: With 47 states and Washington, D.C. partially legalizing cannabis, there's growing acceptance among American consumers. Anticipated industry-friendly legislation and banking provisions may further propel the sector's growth.

Disadvantages of Investing in Cannabis Stocks

Limited Financial Services Access: Due to complex regulations, many cannabis companies face challenges in accessing traditional financial services, hindering their ability to raise capital and compete with established counterparts.

Competition and Oversupply: Fierce competition in the cannabis industry often leads to oversupply and falling prices, impacting the profitability of companies. Increased competition and oversupply pose challenges for investors aiming to generate returns.

Exploring the Leading Cannabis Stocks Set to Shine in the Fourth Quarter of 2023

The information provided is for informational purposes only, and the author does not hold any of the mentioned stocks or ETFs as of the article's writing date.

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