4 Strong Buy and Hold Hemp Stocks for 2021
While growth investors are generally excited about companies in the technology sector, one industry producing a diverse range of consumer products has garnered interest in recent times. The cannabis sector which thrives on natural plants has emerged as one of the most promising sectors for long-term growth investors. After the legalization of the hemp cultivation in accordance with the Farm Bill of 2018 in the U.S., several companies continue to seek success in this space. What are the 4 strong buy and hold hemp stocks for 2021?
Hemp Stocks: A Clear Upside
CBD oil which is derived from hemp processing has been widely acknowledged as a potent remedy against depression, anxiety, and other mental disorders. Besides medicinal properties, industrial hemp is also immensely useful in the production of automobiles, furniture, textiles, and construction materials. According to the Brightfield Group, the CBD industry is likely to expand to more than $9 billion by the end of 2022.
While the upside to the industry is evident, quarterly results of the leading cannabis industry players highlight that most of them are yet to turn a profit. Concerned investors have been offloading cannabis and hemp stocks over the last 18 months. COVID-19 concerns and rising volatility in the equity markets fueled 2020 sell-offs. After the first six months of 2020, it seems most of the cannabis stocks have bottomed out. Despite losses, revenue for most cannabis and hemp producers is on the rise. Growth investors are taking note of the situation and reconsidering entering the cannabis space once again.
While many companies will fail to capitalize on the explosive hemp industry, both Cannin and the Brightfield Group understand the substantial upside some companies will experience. That said, what are the 4 strong buy and hold hemp stocks for 2021?
#1 Charlotte’s Web Holdings
Charlotte’s Web (OTC: CWBHF) has been one of the leading players in the CBD-hemp space and has an enviable advantage in the high-growth segment. CWBHF is a vertically integrated operator and owns a massive 137,000 square-foot facility in Colorado.
Due to the rising demand for CBD-hemp, the company also expanded its hemp acreage by more than 1800% in 2019. Charlotte’s Web also has an expansive network of retail outlets selling its products, which has now exceeded 8,000 to date.
Charlotte’s Web is currently trading at an all-time low of about $2.43/share, or about half of the current price target set by the Wall Street Journal. Because of their strong business model, we believe Charlotte’s Web is one of the 4 strong buy and hold hemp stocks for 2021.
#2 Canopy Growth Corp.
Undoubtedly the largest cultivator of CBD-hemp globally, Canopy Growth (NYSE:CGC) is poised to be one of the top cannabis stocks in the upcoming decade. The marijuana heavyweight is backed by a beverage giant that has invested $4 billion for a 38.6% stake in Canopy to date.
The hemp stock is thus well-positioned to strengthen its foothold in the CBD-infused beverage market which is on the brink of phenomenal growth. Canopy also has a first-mover advantage having been one of the first licensed producers from Canada to enter the U.S. markets.
Sensing the change in business requirements during these uncertain times, Canopy also launched First & Free, its online shop for CBD-wellness products.
The company is yet to be profitable but its revenue growth remains intact. Canopy is focused on aggressively expanding its portfolio of Cannabis 2.0 products and recently acquired This Works, a CBD-based skincare and sleep solution company.
Moreover, Canopy just launched its new range of CBD-based wellness products under the Martha Stewart label. The regulatory atmosphere isn’t fully conducive to wellness companies and there are still consumer apprehensions surrounding hemp products. In such a situation, a partnership with a renowned name like Martha Stewart will go a long way in strengthening its brand image.
Because of this, we believe Canopy Growth remains as one of the strong buy and hold hemp stocks for 2021.
With multiple hemp-products in its arsenal, Tilray (NASDAQ: TLRY) is one of the most prominent cannabis companies which will make a mark in 2020 and beyond. After debuting in the U.S. markets at $17 per share, the company was quick enough to shoot past $300 per share, before plummeting to its record low of $2.43 in early 2020.
Cannabis investors have already taken note of Tilray’s growth prospects. The company has shed a lot of its gains in the past six months, thanks to COVID-19 induced market volatility and the company’s mounting losses. However, for an industry that is still in its infancy, investors need to look at this hemp stock from a long-term perspective.
To expand its U.S. footprint, the Canadian pot producer acquired Manitoba Harvest, which supplies over 70% of the hemp edibles in the country. Its products are sold widely in about 13,500 retail shops in the U.S. including Costco and Walmart.
International expansion is a sure shot growth route for cannabis companies and Tilray stands to benefit from it. The pot stock exports its medicinal products to more than 13 international markets including Germany and Portugal and industry experts believe that this number is all set to double in the next few years. Because of this strong trajectory, we believe Tilray is one of the 4 strong buy and hold hemp stocks for 2021.
#4 GW Pharmaceuticals
GW Pharma (NASDAQ: GWPH) is not purely a cannabis company but a biotech player. Its flagship medicine, Epidiolex, is primarily CBD-based. Epidiolex has been immensely successful in treating epileptic seizures that happen as a result of two rare syndromes in early childhood. This drug has witnessed exponential growth and is a key driver of the company’s revenue. In fact, as of yesterday, the hemp stock received regulatory approval for this CBD drug in Australia.
The company is yet to break-even but has a strong balance sheet with more than $500 million in cash. This highlights its strength which will allow the company to tide over the current economic downturn as well as consider inorganic growth opportunities.
The company’s Q1 results and the stock’s growth since March underline the fact that the pandemic had little impact on this drug-producer. With affordable drugs and lower competitive headwinds, this cannabis biotech giant is likely to maintain its momentum in 2020 and beyond. Because of this, we believe GW Pharma to be one of the 4 strong buy and hold hemp stocks for 2021.
4 Strong Buy and Hold Hemp Stocks for 2021
Cannin Investment Group: Your Hemp Stocks Experts
Cannin.com is your trusted resource for hemp stocks. Our team of financial experts evaluates all emerging hemp stock investing opportunities. We aggregate hundreds of hours of market research to provide tips on the best hemp stocks for 2021.
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Is it too late to invest in hemp stocks? No! This is the perfect time to invest.
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