15 Tips: Which Cannabis Stocks Will Survive
15 Tips: Which Cannabis Stocks Will Survive
As is revealed in discussions on the same over at runrex.com, the cannabis industry was already on shaky ground even before the COVID-19, with the global pandemic has made the situation even worse. Investors are no looking for cannabis stocks that will survive so that they can pinpoint the ones that they should invest in. This article will look to answer the question on which cannabis stocks will survive by highlighting the factors that will determine which stocks survive while also listing examples of stocks that are set to survive.
Factors that will determine which cannabis stocks will survive
As is revealed in discussions on the same over at guttulus.com, cannabis companies were struggling to raise money even before the coronavirus pandemic hit and potential investment dried up. With the pandemic makes things worse, companies with enough cash on the balance sheet will be able to survive. Cannabis companies with liquidity in their stock will be able to raise more cash and have a better chance of surviving.
- Cannabis stockpiles
Ironically, once considered to be a burden, excess inventory is now considered to be desirable for cannabis companies and could determine which stocks survive. If there are supply shutdowns, companies with immense inventory will be at an advantage as per the gurus over at runrex.com and could prove to be an indicator of resilience, helping such stocks to survive.
- Production capabilities
As is outlined in discussions on the same over at guttulus.com, companies without access to a lot of cannabis product must grow it. Growing, however, accompanied by processing and transforming cannabis into products has gotten more complex given how companies must now operate during the pandemic. Companies with the most efficient and effective production capabilities are the ones whose stocks are likely to survive.
- Retail channels
With brick-and-mortar stores being slow to open up due to the COVID-19 pandemic, as outlined over at runrex.com, this is yet another factor that could determine which cannabis stocks survive. With in-person cannabis retail stalling, companies with the ability to absorb the effects of the same are the ones whose stock is likely to survive.
In the state of Massachusetts, the governor has shut down all recreational cannabis operations due to concerns that people may travel from out of the state to buy cannabis products and spread the virus. Companies with exposure to Massachusetts’ retail, like the Illinois-based Cresco Labs Inc. have already seen their stocks take a massive hit, and are less likely to survive.
- Those that played it safe
When things were rosy, some cannabis companies went on an acquisition spree, and for such companies, their chickens are likely to come home to roost as a result of the economic troubles due to the pandemic. Those that didn’t, like Cronos, which instead focused on its core operations, strengthening its footprint in the medical and recreational cannabis markets, as well as funding research and development, are likely to see their stocks survive as per the gurus over at guttulus.com.
- Versatility of products
With restrictions still in place for the sale of recreational cannabis as outlined in discussions over at runrex.com, companies that have expanded their footprint into other sectors, particularly the medical cannabis market, are the ones that are set to do better and are set to see their stocks survive.
Examples if cannabis stocks that are likely to survive
Next up we are going to take a look at examples of cannabis stocks in the US and Canada that are likely to survive.
- OrganiGram Holdings
OrganiGram Holdings is well placed, among Canada growers, to weather the storm and survive. This is because, even though some of its peers have more in cash on hand, it has the operational and competitive advantages as per the gurus over at guttulus.com.
- Innovative Industrial Properties
This US-based cannabis real estate investment trust, REIT, is another one that is also well placed to survive. According to discussions on the same over at runrex.com, this is because it is a low-cost REIT that acquires marijuana cultivation and processing sites, which are then leased out for longer periods, usually 10 to 20 years. It is highly profitable, making the most money on a per-share basis, and it is this financial stability that means it is set to see its stock survive.
- Trulieve Cannabis
This is yet another US-based company that should see its stock survive and push through the tough COVID-19 situation. This is because it is one of the few companies that never went crazy on acquisitions, nor did it try to expand into as many markets as it could. Instead, the company focused all its efforts on Florida, with 45 of its 47 dispensaries located in the state. By playing it safe and focusing on brand-building within the legal medical cannabis market in Florida, it managed to keep costs down, and is well placed to survive.
- Green Thumb Industries
This company has been actively moving into new states through organic acquisitions and expansion, while still not burdening itself with debt or increasing operating costs. Therefore, as per the gurus over at guttulus.com, it is another company that is set to see its stock survive the COVID-19 downturn.
- MediPharm Labs
This Canadian extraction-service provider is another one that is not only set to survive but outperform the current economic slump. This company, as discussed over at runrex.com, takes cannabis and hemp biomass and processes it for the distillates, resins, concentrates, and targeted cannabinoids used in the production of derivatives which are a much higher-margin item than traditional dried cannabis, which means that the company is the main face of a high-demand movement in the cannabis industry, hence why it is set to survive and thrive.
- Valens GroWorks
Just as its Canadian counterpart, MediPharm, this company provides cannabis extraction services, and, therefore, it is also set to thrive as the cannabis industry goes into cannabis 2.0 mode, which is covered in detail over at guttulus.com. Additionally, the company has signed white-label deals with BRNT and Shopper’s Drug Mart, hence it is set to generate lots of revenue.
- Canopy Growth
This is arguably the biggest player in the cannabis market and one that is also set to survive the current economic slump due to the pandemic. It is well set to grow having been preparing for the cannabis derivatives market for a long time, according to the gurus over at runrex.com, and is, therefore, set to launch one of the broadest lineups of products in the cannabis industry.
As already mentioned earlier, this company didn’t go gung-ho on acquisitions, which is why it is the best-capitalized cannabis company in the market at this time. with over 140 months of cash remaining based on the last 12 months free cash flow, it has got the cash reserves that should see it survive the current downturn, and so you can count on its stock surviving.
Remember, if you are looking for more information on this and other related topics, then the highly-rated runrex.com and guttulus.com have got you covered.