October 17 is the big day that recreational marijuana will become legalized in Canada. The market has already pounced on a number of cannabis stocks in anticipation of the landmark day to seriously consider. Early investors have seen upsides of over 1,000 percent from a number of companies, and last month was a whirlwind price volatility for a number of pot stocks.
There is still plenty of short-term upside potential for a few pot stocks out there though, even after last month’s frenzy. While Tilray Inc. has been one of the most talked about companies, and seen saw an outstanding amount of trading activity in September, investors should turn their gaze to other stocks that offer either greater market share or a lower entry point.
Canopy Growth Corporation
Canopy Growth Corporation is the first cannabis company to be listed on the New York Stock Exchange and is trading at around the $50 per share mark currently, and more upside potential for both short and long term investors. The company is currently well positioned, anticipating a market share of around 40 percent following legalization.
Moreover, the company is owned in part by established alcoholic beverage manufacturer Constellation Brands, which owns Corona beer among others and has exclusive agreements with the company.
“Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy’s market-leading capabilities in this space,” said Rob Sands, CEO of Constellation Brands. “We look forward to supporting Canopy as they extend their recognized global leadership position in the medical and recreational cannabis space.”
Having the backing of an established company provides a number of key benefits, including strategy, marketing, and distribution expertise dealing with a vice product.
Aurora recently disclosed that it would be listing on the New York Stock Exchange at some point this month. While the timing and symbol of the listing haven’t been disclosed, the move will prove to be a catalyst for the stock.
Part of the appeal for investors in Aurora Cannabis should be the company’s own holding in other marijuana ventures. With over $700 million invested across the industry, Aurora will act in part as an overall cannabis fund for investors.
Additionally, the company is expecting production levels that are comparable with Canopy Growth’s and is reportedly in talks with Coca Cola to partner on a CBD soda for the United States market.
Cronos Group is trading on the NASDAQ at just under $10; down from it’s all time high of $13.75 reached last month. While it doesn’t have the market share of Canopy growth or Aurora Cannabis, a sub-$10 entry point on a stock in an emerging market is hard to resist.
It’s likely that as time goes on Cronos will either be swallowed by the competition, left in the dust, or develop as a fringe company from their already existent vertical in the medical marijuana industry. For investors looking for a short-term payout, the sub-$10 entry point may be an attractive investment.