Analysts who research marijuana stocks say even some at the top of the market could lose money in 2019
There are no guarantees in today’s marijuana investment market. While legalization is spreading and investors are frantically purchasing stock in companies traded in the U.S., even leading stocks could lose money in 2019. Here is a look at three leading stocks that are likely to end the fiscal year 2019 with a full-year loss.
The day-trading favorite Tilray has a high probability of remaining in the red through the end of the next fiscal year. The company has international expansion ambitions, but that would come after its immediate plans for capacity expansion. In the near-term, Tilray faces high growth costs that threaten to perpetuate losses even as its sales soar.
Canopy Growth Corp
Medical marijuana company
Investors hopeful that Canadian marijuana grower Canopy Growth Corp. will be the biggest winner in three weeks when the drug becomes legal in Canada could be disappointed in 2019. This is because Canopy Growth anticipates a high financial burden from expansion.
The company needs more infrastructure. Growth investments combined with its need to build up its brands and marketing spend has lead Wall Street to predict it will lose money in the fiscal year 2019.
Packaging solutions for the cannabis industry
A leader in the ancillary marijuana stock sector, KushCo Holdings is also on the list of likely losers in 2019. KushCo stock is tempting after posting 171 percent sales growth in the last fiscal year. However, the company’s ambitious acquisition strategy saw it spending liberally in recent months.
While KushCo is well positioned to capitalize on cannabis product packaging as well as branding and website development, it is not likely to repeat its 2018 fiscal year gains in 2019.