As the mainstreaming of marijuana gathers momentum, a growing number of countries are expected to make consuming cannabis legal over the next few years.
Significant investments, improved distribution and refined marketing strategies mean theses public cannabis companies are only just starting to sprout. Cannabis stock investors are looking for the industry to deliver improvement this year.
With edibles now available across Canada, investors will be looking to see if Cannabis 2.0 can add much-needed topline growth to the Canadian cultivators. In the U.S., recreational legalization is expected to be a ballet issue in New York and Florida this year, which could reignite interest in cannabis stocks.
High-flying and volatile cannabis stocks have caught the attention of both the Main street and Wall Street this year.For investors ready to jump on the hemp CBD bandwagon, there are a few potential stocks to consider buying at these levels.
1. 1st Prestige Wealth Management (OTC: FPWM)
Charlestowne Premium Beverages Inc. (OTC Pink: FPWM) (the “Company”), is looking to become a significant presence in the premium cannabidiol (CBD) infused alcohol space. With the easing of Covid-19 lockdown restrictions internationally, the company is resuming plans and activities to implement its short-term business goals. These include rekindling distribution partnerships and product development programs.
As countries imposed nationwide lockdowns to contain the Covid-19 pandemic, consumers around the globe unsurprisingly took to alcoholic beverages as a means to improve their lockdown experience. When restaurants and bars were forced to close their doors, shoppers headed to off-premise sites to purchase beer, wine, and spirits, resulting in double-digit growth in alcohol-based products worldwide.
Further, during the Covid-19 pandemic, the premiumization of the sector-whereby consumers buy alcohol at higher prices per volume on average-has continued, as people transfer their on‐premise spending to at‐home consumption. In this sense, it is possible that beyond the rise in the amount of drinking, the growth in the sector is also being driven by consumers looking for higher quality products.
“Looking at the life-changing policies imposed across the world for the past eight weeks, it is encouraging that we have found that spirits industry sales increased during the shutdown period, as well as people’s growing interest in premium products. These provide great opportunities for us, while additionally we have noticed that overall product development in the market has lagged. As the world economy re-opens, there is pent up energy to aggressively pursue product development,” said Martin D. Ustin, company CEO. “We want to position FPWM to be ready to take advantage of the re-opening. We have noticed that the strongest recent growth is in the premium product sector (where quality counts), and that is at the core of our company philosophy.”
As a matter of priority, contacts with South American suppliers have been re-established and several new unique product and packaging programs have been rekindled. The Company is finalizing the change approval process with FINRA to complete its official rebranding to Charlestowne Premium Beverages. As business operations resume, FPWM expects to share additional announcements in the coming weeks.
Charlestowne Premium Beverages Inc (OTC Pink: FPWM) is a company that develops, produces, markets, and distributes alcoholic beverages worldwide. The Company’s portfolio showcases spirit brands such as Papa Vodka, Crocodile Tears Vodka, Proprietor’s Reserve Whiskey, and Lord Proprietor’s Special Reserve Whiskey. Charlestowne Premium also has Wholesaler and Import permits from the Alcohol and Tobacco Tax and Trade Bureau – the governing body for spirits in the U.S. under the Department of the Treasury.
To learn more, please visit www.charlestownepremiumbeverages.com
2. Tilray (NASDAQ: TLRY)
Tilray (NASDAQ: TLRY) has established an international presence in 13 different countries. The company also licenses U.S. cannabis brands like Marley Natural, Irisa and Goodship in Canada via its partnership with Privateer. In addition, Tilray has a major agreement with alcohol beverage maker Anheuser Busch Inbev (BUD). The research and development deal is currently restricted to Canada, but management expects the deal will eventually be expanded globally. The company increased its revenue 11% sequentially in the March quarter, despite the Covid-19 pandemic. After initiating a cost-cutting program, the Canadian pot producer reported smaller-than-expected losses and said Monday night that it hopes to achieve positive cash flow in the December quarter.
Pantry-loading, or efforts to stock up before lockdowns, brought a burst of demand, said chief executive Brendan Kennedy on a conference call. “We did see a bit of a bump in March,” he said, “but what we have seen is that things settled down in April so far at a level that was higher than what we were seeing in January and February.”
The company’s March quarter revenue of US$52 million was more than double the prior-year period’s and up 11% from the dismal level of the December stretch . Sales of recreational pot rose 23% sequentially, to $21 million, while sales of nonintoxicating hemp products increased 14% sequentially, to $21 million. Medical cannabis sales in Europe exceeded those in Canada for the first time in Tilray’s history.
3. Aurora Cannabis (NYSE: ACB)
Aurora Cannabis’s third-quarter revenue was 78.4 million Canadian dollars, which beat analysts’ estimate of 66.6 million Canadian dollars. The revenue also showed YoY (year-over-year) growth of 20.3%. The surge in marijuana sales amid the pandemic helped the company’s revenue to rise compared to its revenue of 56.0 million Canadian dollars in the second quarter of fiscal 2020.
Aurora Cannabis sold 12,729 kilograms of cannabis compared to 9,501 kilograms in the second quarter of fiscal 2020. Consumer cannabis’s net revenue was 41.5 million Canadian dollars, which comprised of Daily Special, which launched in February, and other Cannabis 2.0 products. Medical cannabis’s revenue was around 31.1 million Canadian dollars, which included of 27.0 million Canadian dollars from Canada and 4.0 million Canadian dollars from international medical cannabis sales.
4. Canopy Growth Corp. (NYSE: CGC)
Canopy Growth Corp. (NYSE: CGC) operates in 15 countries and owns popular marijuana brands like Tweed, LBS and DNA Certified. In addition to its core cannabis business, Canopy is preparing to launch a number of new beverage, vapor and edible products. The company says beverages could eventually grow to represent a fourth of its overall cannabis market. Canopy Growth’s strong balance sheet with Constellation Brands’ support gives it an edge. Recently, Constellation Brands exercised its warrants of Canopy Groth shares. The company still has faith that Canopy Growth could emerge in the cannabis space. Amid the COVID-19 pandemic, Canopy Growth announced that it will proceed with more Cannabis 2.0 products.
On May 12, the company provided an update on its already launched products along with upcoming products. Among cannabis-infused beverages, the company shipped Tweed Houndstooth & Soda and Tweed Bakerstreet & Ginger in March and April. They’re THC-infused ready-to-drink beverages. The company received positive reviews and good consumer demand for the products. Notably, the company shipped more to meet the current demand. Canopy Growth expects to launch two additional beverages, Houseplant Grapefruit and Deep Space, in the coming weeks. The beverages will launch through retail and e-commerce platforms.
About the beverages, CEO David Klein said, “Our beverage innovation team took a flavor-first approach with our drinks, and the first four offerings to hit the market demonstrate the range of our portfolio, with flavor profiles that will satiate our consumers’ palates.”
In the cannabis-infused chocolate category, the company already launched four products—Tokyo Smoke Pause, Tokyo Smoke Go, Tweed Houndstooth & Mocha, and Tweed Bakerstreet & Peppermint—which it discussed in the third-quarter earnings call. Management said that the premium THC-infused bars have been popular with consumers.
A few industries offer the long-term growth potential of legal cannabis which could ultimately mean that patient investors in the green rush are handsomely rewarded. If the snowball starts rolling toward a bullish event, the bounce buying volume coupled with the long buying volume from bulls and momentum traders could create an extremely volatile near-term spike in these four cannabis companies.