These 7 Marijuana Stocks Have Bucked the Trend and Produce Big Gains for Investors
Cannabis stocks have historically performed poorly during the summer months and that trend has continued in 2019. Despite the cyclical downswing, we are currently in the midst of, the following marijuana stocks have experienced strong enough catalysts to push their share prices higher.
Trading stocks in a market downswing is similar to trying to swim against a current. The general market direction drags the majority of stocks with it. It takes a keen eye to be able to pick out the winners amongst the crowd. Although it can be difficult, if you chose the right stocks there are still large profits to be had.
The stocks featured on our list have all produced strong returns for its shareholders in a time where market uncertainty and short-sellers reign supreme. Their success in the market was fueled by a variety of different catalysts which we highlighted below. Some of the names on our list may surprise you and some may not.
Without further delay, let’s jump right in.
- June 21, 2019 Price: $9.80
- 2019 Summer High: $11.03
- 2019 Summer ROI: 12.55%
Curaleaf barely snuck onto our list due to the unfortunate recent news surrounding the company’s issues with the FDA. On July 23, 2019, the FDA made an example of Curaleaf by firing a warning shot at the company over what the FDA claimed were false and misleading health claims on its CBD based products. Curaleaf responded to the FDA’s warning letter several days later and during this time one of the industry’s top analysts described the recent pullback in Curaleaf’s stock as a ‘Strong Buying Opportunity.
Shares of CURA stock regained some of the losses caused by the FDA warning and if it wasn’t for this negative situation, Curaleaf would have likely placed closer to the top of our list. Prior to the FDA situation, Curaleaf was riding high on the heels of its $875 million landmark deal to acquire Grassroots. Once completed, Curaleaf will become the largest cannabis company in the world.
- June 21, 2019 Price: $8.39
- 2019 Summer High: $10.05
- 2019 Summer ROI: 19.78%
Aphria obviously made our list but their placing may be surprising to some. The company blew away analyst and investor expectations when it reported profitable Q4 earnings last week. Shares of APHA soared over 42% in response to Aphria’s unexpected earnings beat. The earnings report was so strong that it caught investors off guard and the FOMO effect caused cannabis equities across the board to rise significantly. The sentiment on the street quickly flipped and left investors wondering which cannabis company would report positive EBITDA next.
The speculatory buying spree was short-lived as stocks have retraced since the earnings report but the sentiment remains shifted. If Aphria could report such profound numbers than it’s possible that profitability for other cannabis stocks could be just around the corner.
- June 21, 2019 Price: $0.43
- 2019 Summer High: $0.60
- 2019 Summer ROI: 39.53%
Heritage Cannabis comes in at the #5 spot on our list fueled by the company’s huge deal with leading licensed producer Cronos Group (TSX: CRON) (NASDAQ: CRON). The Cronos supply agreement was announced in late July, around the same time shares of CANN reached their 2019 summer high.
The supply agreement will see Heritage supply cannabis extract in order to fill and package vaporizer devices for the Cronos Group brands PEACE NATURALS and Spinach. Heritage will employ a variety of Cronos Group’s unique and proprietary formulations. The deal is valued at $35 million and is set to run for 2 years with an extension option. This supply deal with Cronos is a major step in the right direction and we look forward to future earnings reports from Heritage Cannabis.
- June 21, 2019 Price: $5.60
- 2019 Summer High: $8.60
- 2019 Summer ROI: 53.52%
Coming in at the #4 spot we have another extraction player in Neptune Wellness. The price of dry flower has been on the decline and has caused investor focus to shift towards the value add cannabis extraction space. With legalization 2.0 on the horizon in Canada, stocks like Neptune Wellness and Heritage Cannabis have seen a large increase in investment dollars.
Canada expects to legalize cannabis edibles, vapes and other forms of concentrates on October 17th of this year with sales officially slated to begin by December 2019. This news alone is a large catalyst for Neptune but it wasn’t the only driving force behind the stock’s impressive rise recently. Just last month, Neptune closed a USD $41 million private placement in addition to completing its acquisition of the U.S. based hemp extraction company SugarLeaf. The SugarLeaf deal catapulted Neptune Wellness into a North America wide force in the cannabis extraction sub-sector.
- June 21, 2019 Price: $0.70
- 2019 Summer High: $1.08
- 2019 Summer ROI: 54.29%
One of the more surprising performers of the summer is certainly Auxly Cannabis who takes the #3 place on our list. Investor interest in Auxly had been almost non-existent until the company released news in late July that was straight out of left field. Auxly reported to investors that it secured a monster investment from big tobacco player Imperial Brands (LON: IMB). According to their deal, Imperial Brands invested roughly $123 million in Auxly via convertible debenture. The unexpected news caused shares of XLY to gap open and soar for the past 9 trading sessions.
Catalysts like Auxly’s and Aphria’s that seem to come out of nowhere always have the most profound effect on the share price. Auxly was also granted a global licence to Imperial’s vape technology as well as access to its vapour innovation business, Nerudia. XLY stock is still relatively cheap compared to historical prices so it will be interesting to see how long this current breakout lasts.
- June 21, 2019 Price: $18.68
- 2019 Summer High: $30.10
- 2019 Summer ROI: 61.13%
Charlotte’s Web takes home the #2 spot on our top gainers of the summer list. Unless you’ve been living under a rock, then I’m sure you’ve heard by now that Charlotte’s Web landed arguably the greatest U.S. CBD distribution deal in the industry to date. At the end of July the company announced a colossal deal with America’s largest grocery retailer Kroger.
As per the terms of their deal, Charlotte’s Web will see its hemp-derived CBD products rolled out across the nation and into 1,350 Kroger and Kroger Family Stores. The company’s topical CBD products will be available at the following stores: Kroger, Dillons, Fry’s, Fred Meyer, King Soopers, Mariano’s, Pick ‘n Save, QFC and Smith’s. Shares of CWEB reacted immediately to the huge news and climbed as much as 12% that day. CWEB stock has carried that momentum into this week and is currently in the midst of the first pullback on a prolonged breakout.
- June 21, 2019 Price: $0.65
- 2019 Summer High: $3.00
- 2019 Summer ROI: 361.54%
Ignite International Brands absolutely blew away the competition to take down the #1 spot on our list. In fact, it wasn’t even close. Since the summer began, Ignite’s stock has increased in value by 361.54%. CWEB, which came in 2nd, put up a gain of only 61.13%. Ignite is a cannabis company that was started by Dan Bilzerian aka ‘The King of Instagram’ and recently completed a merger which saw the publically listed Canadian licensing offshoot combined with the company formally known as Ignite U.S. The company recently made headlines when they travelled to the United Kingdom for the launch of its Ignite CBD brand in the European market. Since that point, the stock has been on an absolute tear racking up impressive gains for investors.
Ignite has followed up its U.K launch with a licensing deal with WeedMD (TSXV: WMD) (OTCQX: WDDMF) and a U.K CBD order from WHSmith. The aforementioned catalysts are certainly responsible for the bulk of the current surge in share price, but something else recently caught our eye which we believe played a major role in the current breakout. Ignite CEO Dan Bilzerian has a massive combined social media following of over 40 million followers and he had been very quiet about Ignite’s stock until recently.
Bilzerian shared the past couple of BILZ press releases on his Instagram account which has 30 million-plus followers. His IG followers are predominantly males between the ages of 21-35, essentially the perfect target demographic. This could have played a major role in bringing in the huge influx of buying Ignite’s stock saw recently. If Bilzerian continues to tap into his vast network of social media followers it could bring enormous eyeballs onto the stock and help further propel the share price higher. Also, Ignite’s OTC Markets listing is currently on the ‘grey sheets’. If the company takes the necessary steps to uplist its OTC: IILBF listing onto the OTCQX or OTCQB it would allow for Bilzerian’s U.S. followers to buy and sell the stock much easier.
Did we miss any cannabis stocks on our lists?
Shoot me an email at Ryan@Circadian-Group.com and let me know.
Charts source: Barchart.com
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Disclaimer: Ignite International Brands (CSE: BILZ) was previously a paid client of The Cannabis Investor.