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Barron's: 3 US Marijuana Stocks to Buy Over Canadian Rivals

Barron's: 3 US Marijuana Stocks to Buy Over Canadian Rivals
(Eldadcarin/Dreamstime)

By    |   Monday, 09 September 2019 09:24 AM

A team of analysts at Canaccord Genuity reportedly suggested investors should give U.S. pot stocks another look.

The Canaccord Genuity team recommends three top picks: Curaleaf Holdings (CURLF); Cresco Labs (CRLBF); and Harvest Health & Recreation (HRVSF), Barron’s reported.

These American pot stocks trade at a significant discount to shares of growers in Canada, the team notes.

“That’s because American growers, known as multi-state operators, or MSOs, have set up shop in places where marijuana is only legal at the state level. Because it’s still a federally illegal drug, they can’t list on senior U.S. exchanges such as the New York Stock Exchange or Nasdaq. U.S.-based growers generally list on the Canadian Securities Exchange in Toronto and the OTC Markets Group in the U.S.,” Barron’s reported.

“That’s left the door open for Canadian growers to take investments from major U.S. companies. Canopy Growth (CGC), for example, has received billions of dollars from 34% stakeholder Constellation Brands (STZ). Altria owns a stake in Cronos Group (CRON), and Anheuser-Busch InBev (BUD) has partnered with Tilray (TLRY).”

However, Newsmax Finance Insider Stephen McBride recently warned investors that he would "never put a penny in marijuana stocks" because of the high risk and uncertainty of turning a lasting, solid profit.

"To understand why, you must look past the stock performance and into the actual business of selling marijuana," McBride recently wrote.

"The fact is, most marijuana companies stand little chance of ever making significant profits. Sure, it’s new and exciting. But marijuana is a tough business. And it’s going to get much, much tougher as the market matures. You see, now that it’s becoming legal, there’s nothing special about marijuana. Like corn or wheat, it’s a crop," he said.

"To be clear, parts of the marijuana business will boom over the next couple of years," he wrote.

"Cannabis shops will continue popping up all over the place. I’m sure big American companies will continue to invest billions in the sector. And I’m sure a handful of pot stocks will defy the odds and go on to achieve big gains. But make no mistake: The whole marijuana industry is staring down the barrel of price compression," he said.

"Pot stocks are no place for investors to put their money."

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A team of analysts at Canaccord Genuity reportedly suggested investors should give U.S. pot stocks another look.
marijuana, pot, stocks, buy
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2019-24-09
Monday, 09 September 2019 09:24 AM
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