M&A is going to take the cannabis market by storm in 2020. And to help our readers identify clear-cut winners, we are providing this in-depth guide on how to find the top pot stocks to own for buyout potential in the weeks ahead.
Here’s how the winners break down by category…
Medical Marijuana
Investing in medical marijuana companies operating in licit jurisdictions is your safest bet for dominance in this M&A explosion. Look for the companies with exclusive licenses and global partnerships.
Consensus pick: Cronos Group Inc. (Nasdaq: CRON)
Cronos is a prime example of how M&A can deliver wild profits. We first recommended this Canadian company at $6/share, and Altria’s investment popped it to over $25. But Altria still only owns 45% of outstanding shares. There’s room to grow, especially with Cronos’ lucrative deals in Germany, Israel, and Australia.
Retail Sector
Cannabis, says our consensus pick, is “a potentially disruptive ingredient.” And it’s found its way into a dozen consumer niches… pet care, sleep, wellness, pain relief, alcohol… Look for massive brands like General Mills (NYSE: GIS), Procter & Gamble (NYSE: PG), and Johnson & Johnson (JNJ) to make strategic acquisitions in the cannabis and hemp space.
Consensus pick: Canopy Growth Corp. (NYSE: CGC)
CGC is the world’s biggest cannabis company, so it’s going to need to grab the attention of a huge mainstream player for an M&A pop. But we think that’s feasible. After all, Canopy has it all: a massive portfolio of products, 100+ patent applications, 10 world-class production facilities, and has secured major celebrity endorsements from Snoop Dogg and even Martha Stewart.
Growers & Producers
Even in 2019, growers hold huge potential for investors. There’s no need to worry about a supply glut – for the foreseeable future, weed is not “just another agricultural commodity,” according to Jefferies analysts.
Consensus pick: Aphria Inc. (NYSE: APHA)
This lesser-known grower just hit a gold mine – in the form of a license to increase its production capacity by over three times. This will catapult Aphria to the top of the pile, practically overnight, and that is sure to catch the eye of profit-hungry consumer companies eager to make a deal. Plus, compared to its peers, APHA financials are strong and its valuation is quite low, leaving plenty of room for a generous M&A offer to pop the share price.
Cannabis Beverages
Cannabis-infused drinks are the hot thing right now, projected to be worth $600 million by 2022, and no one’s in a better position to exploit the trend than Big Beverage.
Consensus pick: Heineken (OTC: HEINY)
Reasoning: As the market waits anxiously for Pepsi or Coke to dip a toe in, Heineken has already flown into action, launching a CBD-infused non-alcoholic beer… and demand has been insane. A lot of other attempts have flopped. So for now, we think the best bet for investors may be to stick with the endeavors backed by big money and invest in BigBev itself. After all, with U.S. soda and beer sales plummeting, BigBev has its hands tied – expand to this new market or lose it all.
Further Research: Looking at SMALLER companies for BIGGER gains…
All the companies listed above are proven winners with plenty of consensus support from the broader financial industry.
They all stand to win HUGE from the cannabis buyout frenzy in absolute terms.
But there are some smaller players out there that stand to win much, much bigger in relative terms.
So, if you’re the type that likes to get in on trends early so you can rake in the biggest profits, today could be a day that you’ll remember forever.
Right now, there are five tiny companies that are expected pay out 1,000% gains for those that get in now.