2 Top Cannabis Stocks to Watch in September
Although marijuana was legalized nationwide in Canada in October 2018, Canadian cannabis companies have yet to reap the potential benefits of the newly licit market. Lagging profitability is partly due to companies' initial overestimates of consumer demand for marijuana. Many entities now find themselves with millions of capital invested in lavish hemp production facilities, only to be met with low sales numbers. As a result, facility closures and inventory write-offs have forced many businesses to endure consistent and devastating blows to their profitability.
The sector is definitely taking a lot of heat, but the subsequent stock market sell-off has created new opportunities for investors to buy value stocks at a discount and growth stocks at a reasonable price. After all, the legal cannabis market in Canada is valued at CA$2.4 billion this year, and household spending on legal marijuana overtook household spending on illicit marijuana for the first time ever. A few companies are especially well-poised to capitalize from the uptick in demand, demonstrated by the nation's year-over-year overall sales increase of 75% in Q2 2020.
That's not all. While the Canadian marijuana market has seen its share of woes, cannabis companies across the U.S. are jumping onto the bandwagon in anticipation of federal legalization in the states. Let's take a look at two marijuana stocks you should add to your watchlist in September that are based in U.S. and Canada.
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Source Fool.com