Marijuana Stocks To Buy Or Avoid In November
Zacks Investment Research | Nov 04, 2019 06:24AM ET
Marijuana stocks have been through their own share of highs and lows so far this year. Despite being a fast growing industry, supply issues in Canada have affected legal marijuana purchases of late.
High tax rates in some of the U.S. states as well as increase in black-market producers, especially in North America, have hurt sales. As a result, marijuana companies have been seeing a drop in operating margins across the board and have significantly lost value.
Yet, as we focus on November, there are three marijuana stocks that look like solid bargains, while one in particular should be avoided in the near future. Let us take a look —
Square
Square, Inc. (NYSE:SQ) provides payment and point-of-sale solutions in the United States and internationally. But, the company announced plans of launching a platform for business houses to sell cannabidiol (CBD) products last month.
Lest we forget, the FDA has acknowledged that there is immense public interest in CBD as a wellness aid. CBD is widely used in treating pain, inflammation and epilepsy. What’s more, analysts estimate that nearly 65 million Americans have tried CBD and 63% have found it effective.
CBD, in the meantime, is a growing industry. Market research firm Brightfield projected that CBD sales in the United States alone will jump 55% to $648 million by the end of this year. In fact, they expect the U.S. hemp CBD market to reach a worth of $22 billion by 2022.
Square, thus, will certainly make the most of its foray into the CBD space. Square, currently, flaunts a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for its next-year earnings has increased 0.9% over the past 60 days. You can see Zacks Investment Research
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