It’s a scary time to be a financier. Due to fears surrounding the COVID-19 pandemic, the stock market has been hammered over the previous couple of weeks. On March 11, the Dow Jones moved by 5.9%and closed more than 20%down from its most recent all-time high, hence officially going into bearish market area.
With that stated, the worst thing financiers can do is panic.
1. Charlotte’s Web
Charlotte’s Web is the leader in the U.S. market for cannabidiol (CBD) items. Most especially, the U.S. Food and Drug Administration (FDA) recently alerted consumers about the threats of CBD-based items.
Despite this difficulty– and others– I think Charlotte’s Web deserves buying; let’s consider 3 reasons. The company has a strong retail presence in the U.S., with its items in about 11,000 retail locations around the country. It deserves keeping in mind that the company recently made an acquisition that will even more expand its retail existence. On March 23, Charlotte’s Web revealed it was acquiring Abacus Health Products in an all-stock transaction valued at around 99 million Canadian dollars.
Per the agreement in between the 2 companies, each of Abacus’s investors will receive 0.85 share of Charlotte’s Web for each share of Abacus owned. The transaction is expected to close in the second quarter. Abacus Health uses a suite of over the counter hemp products (hemp is originated from CBD) and has a strong retail existence in the U.S. Likewise, Abacus Health boasts a network of about 16,500 healthcare specialists. Thanks to this acquisition, Charlotte’s Web’s presence will expand to “15,000 special doors.”
2nd, Charlotte’s Web is currently in the procedure of substantially increase its production capacity. The business is constructing a 137,000 square foot production facility in Colorado that will multiply its output capability by a factor of10 The center needs to be up and running by the end of the year. Charlotte’s Web is magnificently valued, at least when compared to numerous of its peers in the marijuana market. Given that Charlotte’s Web isn’t yet consistently rewarding, let’s compare the business’s cost to sales ratio with that of Canopy Growth( NYSE: CGC) and Aurora Cannabis( NYSE: ACB)
Charlotte’s Web’s relatively appealing valuation– coupled with its strong retail presence and leading position in the U.S. CBD market– makes the business one of the best financial investment choices in the marijuana market.
2. Ingenious Industrial Properties
Innovative Industrial Properties is a realty investment trust (REIT) that concentrates on renting spaces to companies within the medical cannabis market. Let’s think about 2 reasons this business deserves purchasing. First, Ingenious Industrial Characteristic presently owns 51 properties in 15 specifies with an average lease length of 15.6 years.
There are many more states in which medical uses of cannabis are approved (there are more than 30 mentions that have legislated medical uses of marijuana); given that Innovative Industrial Properties is the leading REIT that concentrates on renting properties to state-licensed medical marijuana business, the company will likely continue its growth to more states.
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2nd, couple of cannabis business have had the ability to publish consistent earnings, and others have recorded earnings thanks to one-time changes or other things that had nothing to do with their core operations. During the 4th quarter of its fiscal year 2020, Aurora Cannabis recorded a net income of CA$104 million, but this consisted of latent gains on acquired liability of CA$1438 million.
By contrast, Innovative Industrial Residence has actually regularly recorded profits.
Ingenious Industrial Characteristic is performing substantially much better than the wider market up until now this year. Year to date, the company’s shares are up by 11.7%, while the S&P 500 is down by 18.6%. In my view, Ingenious Industrial Properties will continue to outperform the market and most other marijuana business, making it an excellent marijuana stock to buy today.
Prosper Junior Bakiny owns shares of Aurora Marijuana Inc. The Motley Fool has adisclosure policy“>