Our Cannabis Stocks Canada forecast published half a year ago predicted the continuation of this raging bull market in cannabis stocks. So far it seems that are spot-on. Here is the good news for bulls: the best is yet to come. Most cannabis stocks show double and triple tops. A breakout out of this kind of pattern will unleash lots of bullish energy. That’s why we are convinced that cannabis stocks will become the type of sector with mega returns in 2019 and/or 2020.
Very important note about our top cannabis stocks and their forecasts for 2019 and 2020: the price targets mentioned in each forecast in this article should be seen as major tops. The price targets are certainly not average prices for 2019 nor for 2020.
We were alerted on this point in this tweet so we want to be very clear on this. We envision some sort of blow-off top in each of these cannabis stocks, which is where we set our price targets as part of our cannabis stocks forecasts.
Before looking into the details of several cannabis stocks and their forecasts for 2019 and 2020 we want to make the point about the ethical aspect of cannabis investing. Many investors still think of cannabis as this illegal thing that makes for irresponsible usage and hence investing in it would also be for irresponsible investors.
Nothing is further from the truth because the industry is maturing and the law is maturing with it (and vice versa). There are very positive aspects of cannabis which are now channeled in health care.
However, there are risks associated with cannabis investing. So it’s not the moral aspect that we believe should be considered first, but rather the risks.
Cannabis Stocks Forecasts vs. Cannabis Investing Risks
First of all, identifying the quality cannabis stocks is imperative. As per Tsaklanos his 1/99 Investing Principles just 1 pct of cannabis stocks should be considered, so that’s a handful of them.
Recently, it became painfully clear with this cannabis stock scam communicated by the SEC that there is fraud happening in the sector. This sentence in this article stands out :”The complaint alleges that, in reality, Greenview had no track record and its sole investment of $400,000 was in a cannabis company that had yet to harvest a crop.”
Our Cannabis Stocks Forecasts Proven Accurate So far
On January 5th, 2019 when the whole world was focused on crashing stock markets we published this:
In the first week of January 2019, on the long term weekly chart of our bellwether cannabis stock, we got a confirmation that the uptrend of Canopy Growth is in tact. We interpret this as ‘the cannabis stock sector bull market is in tact’.
So far it seems that the chart is reflecting the fundamentals, and we strongly see a continuation of the grand cannabis stock bull market in 2019 until proven otherwise.
We only could have gone against the herd because we sticked to the message or our charts as per our 15 leading indicators. Investors are adviced not to focus on fear especially created by financial media and social media. Emotions will kill your profits and will impede you from looking at the real trends (ideally even emerging trends as they arise). We wrote about this extensively in our 10 Tips To Master Investing Without Emotions
Right after we followed up, as everyone was still thinking that stock markets would crash, with this article: Cannabis Investing: The 10-Baggers Of 2019 Are Underway.
In the meantime it seems our forecasts are underway: broad stock markets will continue higher and this will set the stage for high beta stock segments to outpeform. We strongly believe cannabis stocks will outperform, as well as precious metals miners. We will also see the start of a consolidation phase in cryptocurrencies as said in Cryptocurrency Alert: The Crypto Winter Has Ended
5 Top Cannabis Stocks And Their Forecasts For 2019 And 2020
We wrote several cannabis stock forecasts for 2019 and 2020.
Many followers requested to summarize them in one overview as they cannot keep track of all forecasts we publish. That’s why we created this selection of top 5 cannabis stocks and their forecasts for 2019 and 2020 for you.
Note that 4 out of our top 5 cannabis stocks and their forecasts for 2019 and 2020 were published 20 months ago as a paid article. Today, after 20 months, we are opening up this article to the public.
Readers that subscribed to this article back then are looking at strong profits as they had plenty of opportunity to sell into the subsequent top and get back in recently at low prices!
This is our premium article published in Nov 2017 with top cannabis stocks and their forecasts: Canadian Cannabis Market On Fire. Which Stocks To Buy?
The most important why we continue to be bullish on cannabis stocks is because the 2nd reason we pointed out in that article:
More importantly, as seen in the recent news, the total market size seems to be much bigger than initially estimated. Two studies suggested that the total market size in Canada would be around 4 to 6 billion CAD. One was conducted by the government in 2012, the other one by Deloitte in 2016. However, there is a new estimate of the Canadian recreational-marijuana market, particularly Colin Firth partnered with market research firm Oraclepoll Research and found out that the number of recreational users could be more than 11 million. That is twice as much as the other studies found. This is of course not set in stone but it clearly indicates the previous estimates could be largely underestimated.
Here is another recent study: PI Financial Corp. analysts estimate that with current production, funded capacity expansion, and potential yield improvements, projected for 2019 a total demand of 610,000 kilograms vs supply of just 422,115 kilograms.
Yes, we believe cannabis stocks will move much higher in 2019 and 2020.
Cannabis Stock And Its Forecast For 2019 And 2020: Canopy Growth
In determining the Canopy Growth cannabis stock price forecast for 2019 and 2020 of Canopy Growth Corporation (symbol WEED.TO) we look for the top of the rising channel which is shown on chart below. By calculating the potential we look at 2 timeframes: first part of 2019 vs second part of 2019.
- If Canopy Growth would rise fast in the coming months it would have as an upside target of 140 to 160 CAD in the period April to June.
- If Canopy Growth would rise slowly, and only accelerate after the summer of 2019, it would have as an upside target of 208 to 270 CAD in the period July to December.
The price of Canopy Growth in the first week of January was 33 CAD. Assuming that it will peak in the 150 to 250 area in 2019, provided the current uptrend continues and a breakout above all-time highs takes place, it might lead to a 7-fold rise in 2019 (median between 150 and 250). This is also an exit point, just to be clear.
Read more in our Canopy Growth Stock Forecast for 2019.
Cannabis Stock And Its Forecast For 2019 And 2020: Aurora Cannabis
Cannabis stock Aurora Cannabis (symbol ACB.TO) is a fast growth cannabis producer with an international network.
As per our Aurora Cannabis Stock Forecast for 2019 we see a major run coming, similar to the previous one which sent the stock price 5x higher after it broke out.
That’s why our price target (as a major blow-off top) for Aurora Cannabis is $75 in 2019 or more likely in 2020. This is also an exit point, just to be clear.
What we especially like about Aurora Cannabis is this (from their latest earnings report):
Aurora Cannabis continues to ramp its production capacity up from 70,000 kg / annum as reported in November 2018, to approximately 100,000 kg / annum in January 2019. It reaffirms its expectation to achieve at least 150,000 kg / annum of production capacity within the first 3 months of 2019.
We continue to believe that this is a top cannabis stock to hold in 2019 and 2020, hence our ultra bullish forecast.
Cannabis Stock And Its Forecast For 2019 And 2020: KushCo Holdings
Cannabis stock KushCo Holdings (symbol KSHB) is one we tipped 20 months ago for the first time when it was trading much lower than today. In our article Cannabis Stock Kush Bottles, Packaging Producer, On The Verge Of A Big Breakout we even identified that the breakout was coming?
Fundamentally, this is a fast growing company. They have been all around with a corporate restructuring and have grown their outstanding shares (shareholder dilution). Regardless, their growth potential seems to outpace this.
In terms of the chart setup and price forecast we are focused on the long term rising channel. If we use this setup to forecast a target price (again, as the next blow-off top) we derive $20 to $25 in the first half of 2020. This is how the price of the upper channel evolves:
- 17 Oct 2016: $5.0
- 16 Jan 2018: $8.5
- 01 Apr 2019: $14.45
- 01 Jun 2020: $24.56
That’s why we set our price forecast right above $20 for 2020. This is also an exit point to be clear.
Cannabis Stock And Its Forecast For 2019 And 2020: Organigram Holdings
One of our absolute favorites is Organigram Holdings (symbol OGI.V).
It is growing fast, in a controlled way. It has established an international network. We see value in the solid management team as well as the large amounts of cash at hand $55M with a market cap approx $1B. This is a very healthy ratio for cannabis stocks.
The chart of Organigram Holdings does not really allow for an easy forecast. The pattern on the chart is somehow blurry. But if we look at the sector leader (see above, Canopy Growth) and its potential, taking Organigram’s fundamentals into account, we would see the most bullish forecast at $40. Again, a blow-off top which is an exit point and requires profit taking.
Cannabis Stock And Its Forecast For 2019 And 2020: Emerald Health Therapeutics
Last but not least, we were very vocal in our bullish outlook of Emerald Health Therapeutics (symbol EMH.V). Some don’t really understand it, we are focused on their growth potential as seen in the capacity and surface to produce cannabis.
So far they have delivered on their plan. We absolutely want to see a continuation of this. Any suspicious sign that their updates are not legitimate should be taken as a sell signal. We don’t see this happening though.
Their cash at hand at the end of Jan 2019 was $52M on a market cap of $500M, pretty healthy situation.
In our Emerald Health Therapeutics Stock Forecast for 2019 we identified $38 as the major top at the end of 2019 or in the first part of 2020. It is where the rising channel will peak in some 12 to 15 months from now.