Marijuana Bigwigs Canopy, Aurora, Tilray, and Cronos Stock Foreca…

October 17 Marijuana Legalization

The day had been marked in our calendars for a long time: the October 17 marijuana legalization in Canada. But now it has finally arrived, and with it comes a reconfiguration of the marijuana stocks landscape.

This will by no means take place overnight, but we now have a path forward for the marijuana industry to follow that will have massive ramifications for the future of pot.

How Canada is able to handle legalization, the numbers that come through following the October 17 marijuana legalization, and revenue both via taxes for the government and sales—all these factors will sway potential followers of the Canadian model to either jump in or pull back.

In any case, let’s examine four major players in the marijuana industry and what the future looks like for them post-legalization.

CGC Stock Forecast

One of my favorite marijuana stocks, Canopy Growth Corp (NYSE:CGC), is in arguably the best position to take advantage of the new markets following the October 17 marijuana legalization.

There are several reasons for my enthusiasm.

First is that the company has a strong presence in Canada with supply agreements signed across the country. This means the CGC stock forecast can count on a steady revenue stream from several recurring customers.

Furthermore, the company has one of the top production capacities in the industry, meaning it will be more than able to keep up with the demand.

Canopy is also a worldwide player, with operations in locations ranging from South America to Germany.

Its global positioning is going to pay off big-time down the line, making the long-term CGC stock forecast very enticing.

And then you have the company’s savvy exploitation of the market.

It recently acquired American hemp producer ebbu, LLC, saying the move will “complement and accelerate” its already impressive line of marijuana products. (Source: “Canopy Growth to Acquire Assets of Colorado-Based Hemp Innovator ebbu,” Canopy Growth Corp, October 15, 2018.)

The deal will see Canopy complete the purchase by paying CA$25.0 million and issuing 6,221,210 common shares to ebbu in exchange for the assets being acquired. These include ebbu’s progress and specialization in the purification and study of cannabinoids for product development, wholesale, and research purposes.

The makes the CGC stock forecast very interesting as it has a global presence, foundations in Canada, and an always-diversifying range of products.

ACBFF Stock Forecast

Another company that is looking well-suited to take advantage of the October 17 marijuana legalization is Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB).

ACBFF stock has been on a tear lately, up nearly 75% over the past three months.

This is a nice change of pace compared to its performance earlier in the year.

The company has many similar qualities to Canopy Growth, but has been more aggressive in its acquisition strategy, looking to take the top spot in market cap and production capacity in the marijuana industry.

That makes the company’s most recent play on Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF, TSE:TGOD) so out of character.

Aurora let its option on the company’s stock expire from an earlier deal.

Aurora had the right to purchase eight percent of TGODF stock at a 10% discount but passed.

While the company is still entwined with Green Organic, Aurora may be showing that has calmed itself somewhat with this reluctance to buy.

“Aurora has been an incredible partner to date and both parties plan to continue the partnership. They invested $78.1 million into our Company and added tremendous value across multiple areas of collaboration, including the design and construction of our Canadian facilities,” said Brian Athaide, CEO Green Organic, following the expiration of Aurora’s option. (Source: “The Green Organic Dutchman Provides Update on Aurora Cannabis Milestone Option,” Cision, October 12, 2018.)

TLRY Stock Forecast

Now we arrive at two picks I’m not as sure about.

While I believe that Aurora and Canopy have the necessary foundations to be strong long-term players, Tilray Inc (NASDAQ:TLRY) is another matter.

Still coming off the high of its initial public offering (IPO), TLRY stock skyrocketed to unprecedented heights in almost no time at all, driven mainly by hype following its IPO on the Nasdaq.

The first-mover bonus certainly benefited early buyers of Tilray stock, but I haven’t seen enough from the company that makes me believe it’ll be able to push growth moving forward.

It makes it hard to predict the TLRY stock forecast. As such, I would be wary of the long-term sustainability of Tilray stock.

CRON Stock Forecast

Another company with a lot of question marks is Cronos Group Inc (NASDAQ:CRON).

Cronos is the only other marijuana company listed on the Nasdaq, and CRON stock has benefited greatly from that—at times.

That has also made it vulnerable to mass sales in the market that have often hit Cronos stock harder than most, due to a higher number of investors able to access it on a major U.S. listing.

In the CRON stock forecast’s favor, we have several of the key factors mentioned in the Aurora and Canopy sections, but it has yet to see the massive jumps that those two companies experienced in the past few months.

It also appears to be more volatile compared to other similar marijuana stocks, making it an interesting, if risky, play.

Marijuana Stock Performances

The chart below showcases the recent performances of CGC stock (black line), ACBFF stock (blue line), CRON stock (red line), and TLRY stock (green line).

Chart courtesy of StockCharts.com

Analyst Take

The future of the marijuana industry is going to be radically different following the October 17 marijuana legalization.

How the rollout goes and how marijuana companies are able to take advantage are going to be closely watched by investors and governments alike.

Should it prove a success, then all the aforementioned marijuana stocks are in for a healthy dose of gains.

But in the event of a few missteps, I believe that CGC stock and ACBFF stock are the best situated to ride out the rough times and yield gains for many years to come.