Yes, 2018 is not completely over yet. But it is not too early to start looking back at what has been the most crucial year for the Canadian cannabis industry ever. And 2018 was a topsy-turvy for Canadian marijuana stocks.
But three Canadian marijuana stocks clearly indicated the bar this year. While most of their peers are likely to finish 2018 with lower stock prices than they had at the beginning of the year, these three stocks have delivered impressive returns.
What are the three best Canadian marijuana shares in 2018? None other than Tilray (NASDAQ: TLRY) Cronos Group (NASDAQ: CRON) and Canopy Growth (NYSE: CGC) . Here's why these store sizzled this year and if they're wise to buy now.
In China, 201
The company had its fair share of good news in 2018. Tilray became the first marijuana producer to ensure approval of selling both cannabis flower and cannabis oil products in Germany, one of the most important international medical marijuana markets. CalPERS, the largest pension fund in the United States, bought a shareholding in Tilray – the first pure play marijuana share purchased by the fund.
But the biggest reason why Tilray's stock price rose sharply this year was that there were not many stocks available to buy. Tilray's active sounds are very low, with only approx. 10 million shares available to foreign investors. Due to this low flow, any good news for the company created significant upward pressure on the stock price. This was especially true when short-sellers scrambled to cover their positions.
2nd Cronos Group
Cronos Group spent most of 2018 in a negative area. The stock began in August, achieving an annual gain of more than 60% before being thrown back, losing all its winnings and then some. Then came the news that changed everything for Cronos.
The reports were discovered in early December, the major tobacco producer Altria (NYSE: MO) was in discussions with Cronos Group on a possible deal. Soon the Cronos Group confirmed that it was actually in talks with Altria. Only a few days later, on December 8, 2018, an agreement was announced. Altria decided to buy a 45% stake in Cronos for a cool $ 1.8bn.
It didn't take Cronos Group's managers long to figure out how to use the huge influx of cash that would soon be on their way. CEO Mike Gorenstein promised to build the Cronos Group's global activities and invest more in research and development. After a wild trip in 2018, the company looks to finish the year in better shape than ever, and with the share price about 30% higher.
3rd Canopy Growth
In October, Canopy Growth increased by 140% in October, with continued progress from the company's main agreement. In August, alcoholic drivers Constellation Brands (NYSE: STZ) announced that it invested $ 4 billion in Canopy Growth.
A total buy-back on the market and sale in marijuana shares a great toll on Canopy's stock price over the past few months. But Canopy Growth is still more than 10% for the year, enough to make it the third best possible Canadian marijuana strain in 2018.
After neck and neck with Tilray for a while, Canopy Growth again claims the biggest market coverage any Canadian marijuana stock. The company appears to be ready for a flurry of acquisitions that will increase even further with the November Constellation Agreement. Canopy has already purchased a Colorado-based hemp researcher and a German evaporator manufacturer as it received the large cash flow from Constellation.
Do they buy?
I will immediately mark one of these best results of 2018 off the purchase list. Tilray's IPO lockout period expires on January 15, 2019. Insiders will then be able to sell some of their shares, probably with a huge profit. The good news is that Tilray's float will rise. The bad news is that the stock price is likely to be lower if there is a significant level of insider sales.
But my opinion is that Cronos Group and Canopy Growth should be in good shape on their way into 2019. Both companies are either already or will soon be rinsed with cash. Both have strong partners with expertise in building consumer brands.
Canada's recreational marijuana market should pick up momentum, as well as medical marijuana markets in countries around the world. Even the United States could be open to Cronos and Canopy with the legalization of hemp (which is cannabis containing low levels of psychoactive compound THC).
It is possible that 2019 could have as much volatility in the store for these two Canadian marijuana stocks as 2018 did. In the long term, both Cronos Group and Canopy Growth should be the winners of patient investors.