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What’s Next for Meme Stocks?

Meme stocks have surged in value since the GameStop-short seller frenzy back in January. These stocks gained their moniker from a close dependence on the ebb and tide of social media activity.

Big names like BlackBerry (NYSE: BB), Bed Bath & Beyond (NASDAQ: BBBY), and AMC Entertainment Holdings (NYSE: AMC) remain actively traded, with AMC shares rising over 2,600% since January. However, markets show a recent cooldown with reduced meme stock rallies. Some analysts have warned about the overvaluation of AMC stocks.

Additionally, Gary Kensler, the new chief of the SEC, has alluded to a close watch on meme stocks and cryptocurrency, with plans of reviewing market structure for high-frequency traders that upend exchange practices.

The shifting trends in meme stocks and looming uncertainties have led many average retail investors to set their sights on the cannabis industry, which continues to grow in the background. Now could be a time for an alternate focus.

Leading the recent cannabis charge are Canadian-based cannabis giants Tilray (NASDAQ: TLRY) and Sundial Growers (NASDAQ SNDL). Market experts attribute two primary driving market factors: Amazon’s public support of the MORE (Marijuana Opportunity Reinvestment and Expungement) Act and the latest activities of Redditors from the WallStreetBets forum.

The MORE legislation sets to de-criminalize commercial marijuana businesses in several states, potentially seeing a significant rise in sales and public interest. While market experts believe that there is a slim chance of having the bill passed due to filibusters, the media coverage might be sufficient to draw significant interest from retail investors. With all things considered, experts predict that the global marijuana market will grow to USD73.6 billion by 2027.

Marijuana Merger

Tilray has become a talking point in recent months, as it merged with Aphria (NYSE: APH) with plans to become the world’s largest producer and aiming for $100 million in cost savings per year. According to reports, Aphria shareholders will get 0.8381 of a Tilray share per Aphria share.

With combined revenue of $800 million, the companies plan to penetrate the U.S. market to grow and win investors’ confidence. However, scaling a business may not necessarily translate to more valuable stocks, and investors should pay close attention to the synergies in upcoming months with its earnings announcements.

Pot Stocks to Watch

Other cannabis stocks to watch include:

Truelieve Cannabis

Truelieve Cannabis (CNSX: Trul), a Florida-based cannabis company, has impressed investors in 2020, with stocks valued at 167%. Truelieve Cannabis functions via a vertical integration system, making it possible to sustain cannabis cultivation and supply chains across the pandemic season or similar disruptions. The company expects stocks to grow by 63% a year, with an adjusted EBITDA of approximately $355-$375 million.

Additionally, Truelieve recently expanded to Pennsylvania and Maryland, acquiring the brands PurePenn and Solveo Wellness at $66 million. Market investors may consider marking Truelieve as a stock to watch for the long term as it continues to exceed company guidance figures.

Green Thumb Industries

Green Thumb Industries (CNSX: GTII) provides some promising opportunities for investors, with stocks projected to grow by 46.04% annually. Experts calculate the stock to be 53.8% lower than the estimated fair value, and it has displayed a stable 9% volatility over the year.

Founded in 2014 and based in Chicago, Green Thumb Industries owns 13 manufacturing facilities and 58 retail stores across 12 states. Market experts believe that the company will continue to scale, as decision-makers have a license to operate 97 stores, offering some leeway for further expansion.

Green Thumb Industries recently acquired Massachusetts cannabis operator Liberty Compassion Inc. Green Thumb Founder and chief executive officer Ben Kovler shared, “the acquisition of Liberty scales our capacity to serve massive consumer demand in one of the country’s most densely populated regions.”

Additionally, Green Thumb has secured an exclusive partnership with global cannabis brand Cookies, run by rapper and entrepreneur Berner with his partner Jai, a renowned cannabis cultivator and breeder. The partnership sees the first Cookies retail store in Nevada.

Speakeasy Cannabis Club

Speakeasy Cannabis Club Ltd. (CSE: EASY) is an upcoming name with potentially undervalued stocks. The Canadian cannabis company announced that it would soon receive its narcotics dealer license (NDL) and provide psychedelics at an affordable cost. Growing research on psychedelics and their therapeutic benefits for various conditions such as PTSD and anxiety will continue to propel the market.

A combination of factors places Speakeasy at a unique vantage point with potentially substantial investment returns. The company has low overheads, multi-generation experience in cannabis, and a constant drive for quality product development, enabling it to acquire increasingly huge portions of shares in the alternative medicine market, projected to grow to $296.3 billion by 2027.

At the point of this writing, Speakeasy still offers shares at the penny stock level. Putting things into perspective — Canopy, the largest cannabis company globally, produces around 200,000 kilograms of cannabis annually, with a company value of approximately $12 billion. Comparatively, Speakeasy aims to produce 150,000 kilograms of cannabis by 2021, with its current value at $50 million.

We urge investors to consider looking into an undervalued cannabis stock – Speakeasy Cannabis with a 10x potential.

Closing Thoughts

As meme-stock trends begin to simmer, retail investors should consider broadening their portfolios to include alternatives that may go under the radar during the frenzy. Cannabis stock trends generally provide an optimistic prospect, with some companies prepared to soar in the long term. While meme stocks may continue to draw interest as long as social media has its time in the sun, it’s an opportune time to leap into the cannabis market.

Specifically, investors should keep an eye out for cannabis companies ever-ready to invest in technological advancements and global expansion — where there is excellent potential for growth amidst legalization talks.

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