Under the Radar Cannabis Stocks That Could Breakout Soon
Without a doubt, the hottest story of 2019 is cannabis.
Multi-billion-dollar industries are already being uprooted by cannabis, including beverages, alcohol, beer, sports drinks, pharmaceuticals, tobacco, and the $3.2 trillion wellness industry, as the cultural renaissance just gets underway.
All thanks to growing acceptance following Canada’s October 2018 legalization, broad approval for its recreational and medicinal use throughout the U.S., and corporate interest.
According to analysts at Cowen, U.S. cannabis sales alone could reach $80 billion by 2030 – an increase of $5 billion from earlier estimates, and a 4% compound annual growth rate.
Globally, Piper Jaffray believes the market for legal cannabis could be worth $15 billion to $50 billion a year, with global sales growing to $250 billion to $500 billion. All thanks to growing acceptance and legalization in countries around the world.
Even with all of this excitement, there are still stocks that are flying well under radar, including:
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OrganiGram Holdings (OGRMF)
OGRMF produces and sells medical marijuana in Canada. As Canada moves to legalize marijuana use on the federal level, the company is ramping up production to capitalize on new market opportunities as an existing licensed producer. An active expansion includes a 15,000 sq. ft. extract processing facility that could prove quite useful, as the market begins to explode.
Another reason to like OGRMF is its agreement with Nova Scotia Liquor Corporation.
"We are pleased to announce our supply agreement with NSLC," says Greg Engel, Organigram's CEO. "Our home markets have always been a key priority for Organigram and this announcement solidifies our position as the market leader here in the Maritimes. With supply arrangements in place in six provinces, we take great pride in our place as a national leader working towards a sustainable and successful adult-use recreational cannabis market."
Khiron Life Sciences (KHRNF)
Analysts at Canaccord Genuity raised their price target on Khiron Life Sciences Corporation to C$6.50 a share. “In our view, the company has a significant number of potential catalysts that should keep share price momentum going. Commercial sales of medical CBD products are expected in the early part of Q2, while a generous commercial THC quote toward mid-year could further validate Khiron’s distribution strategy,” the analysts noted.
“The passing of Mexican medical and recreational cannabis laws (likely in Q2) are also significant potential catalysts and we note that the company is co-hosting a large cannabis conference, CannaMexico, April 25-26.”
PharmaCielo Ltd. (PHCEF)
Analysts at GMP just initiated coverage on PharmaCielo Ltd. with a Buy rating and a price target of C$12. They also note that PCLO is the best pure-play on the global CDB market. “We consider PCLO to be the most advanced Colombian licensed producer currently, providing a ~6–18 month first-mover advantage over nearly all Colombian competitors. In addition, with CBD extract capacity expected to reach ~17 tonnes in 2019, we believe this qualifies PCLO as the largest international publicly-traded producer.”
“With favorable Colombian regulations, we estimate PCLO could have CBD yields ~250x–300x higher than those available to global peers. We believe PCLO could achieve CBD extract production costs as low as ~$0.15–0.25/gram, potentially the lowest globally.”
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