Cannabis stocks in Canada sold off in the first part of this year. However, the cannabis market in Canada is likely to become so huge that the correction earlier this year was temporary in nature. The powerful bull market resumes, and is set to go much higher. We have an ultra-bullish cannabis stocks in Canada forecast for 2019!
This is one of the many 2019 stock and market forecasts we continuously publish on InvestingHaven.com.
Cannabis stocks in Canada: explosive growth potential
The Canadian government is about to legalize recreational usage of cannabis on October 17, 2018. This has major implications as it comes after many states in the U.S. already legalized cannabis usage (ever expanding market).
We see a couple of evolutions because of this:
- Demand for cannabis will explode because of legalization of recreational usage.
- Cannabis in health products based on the healing effects in cannabis as well as pain calming effects.
- All sorts of new ‘use cases’ will boos the sector. Think of cannabis drinks (similar to energy drinks which was a totally new market not very long ago). Even Coca Cola announced (today) they are actively looking to prepare cannabis drinks.
- Supporting services like software, payment methods, etc will grow like crazy.
Moreover, in terms of market potential, we see a global acceptance and legalization of cannabis over time, outside of North America in areas like Australia, Europe and Asia.
Cannabis stocks in Canada bullish in 2019
It is no secret: we are ultra-bullish on Canadian cannabis stocks. This is the basis for our very bullish cannabis stocks in Canada forecast for 2019.
According to recent research, just in the U.S., the market forecast is an annual compound growth rate of 28% of cannabis demand. This means a threefold growth by 2020. Presumably, this is a conservative to base case forecast, not the (ultra) bullish forecast.
Imagine how disruptive this market is. In Canada, specifically, we know from anecdotal evidence that is well on its way to become hysteria. We are not there yet, the bubble has not burst, but there are early signs for sure.
So it is important to get in fast, in the right stocks, and have a clear exit plan! Do not make the mistake because of any, including ours, ultra-bullish cannabis stocks in Canada forecast for 2019 and 2020, to stay in the market endlessly. Smart investors work out their exit plan when things are rosy and the crowd gradually enters.
Cannabis stocks in Canada forecast for 2019
For the purpose of this article we will use the generic ETF which is called the ‘Horizons Marijuana Life Sciences Index ETF ‘, symbol HMMJ, trading on the Toronto Stock Exchange.
This ETF seeks to replicate the performance of the North American Marijuana Index, net of expenses. The Index is designed to provide exposure to the performance of a basket of North American publicly listed life sciences companies with significant business activities in the marijuana industry. Read more here HMMJ.TO
Note that it is a proxy for the sector, it certainly not only tracks Canadian stocks and has a broad variety of cannabis stocks.
That’s why, for the purpose of this article, we will also focus on the outperforming cannabis stocks in Canada.
The HMMJ.TO chart embedded below is very simple: there is a clear rising channel at play. Although this ETF does not have lots of data it certainly is not hard to forecast.
The easy forecasting method is to extend the two peaks, one at 12.00 and the next one at 23.50. Logically, the next top will be at 47.00 which is likely to happen in 2019.
As this is a North American index we are convinced that Canadian cannabis stocks will outperform. We expect them to triple in 2019. Yes we have an ultra-bullish cannabis stocks in Canada forecast for 2019, but reasonable.
Cannabis stocks in Canada: the outperformers of 2019
Smart investors pick out just a couple of stocks in a booming sector, not more than 3 to 4, for their own diversified portfolio. That’s a much smarter choice than buying an ETF.
However, decent research is required before picking stocks.
It is no secret that our top favorite pick, the most interesting pick with a great cannabis stock in Canada forecast in 2019 is Emerald Health Therapeutics (EMH.V). We exlained this in great detail in our Emerald Health Therapeutics Stock Forecast for 2019 as well as this Canadian Cannabis Stock Will Be A Multibagger In 2018.
It is worth reading both articles, especially the Emerald Health Therapeutics Stock Forecast for 2019. It has a breathtaking chart!
This is what we had to say about our top pick: “That’s why our first price target of our Emerald Health Therapeutics stock forecast for 2019 is $38. That is a 7-fold increase from current levels! We have a high level of confidence on this 2019 stock forecast.”
These are 3 other names that are likely going to become outperformers, read multi-baggers, in random order and in random sub sectors and without specific price targets:
- Organigram Holdings (symbol OGI.V)
- Aurora Cannabis (ACB.TO)
- Kush Bottles (symbol KSHB)
Note, however, that the vast majority of Canadian cannabis stocks may or may not rise. Even the ones rising are not necessarily the quality names, as they rise because of a sector wide participation!
In other words, mind the risks, and there are many of them.
Cannabis stocks in 2019 and beyond: the risks
Identifying the really quality cannabis stocks is imperative. It applies, more than in any other sector, also in cannabis stocks in Canada in 2019 and beyond.
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.”
Only a minority of cannabis stocks is worth purchasing. The vast majority is average at best or a scam at worst. Lots of research is required before engaging in any cannabis stock investment. Our article is not financial advice just educational in nature. Consult a financial advisor beforing engaging in this sector.
Update on January 5th, 2019: how is our cannabis forecast for 2019 performing as 2019 kicks off?
The new year 2019 kicks off in a very bullish way for the cannabis stock sector, especially cannabis stocks in Canada.
One week does not make a market. It may have been an amazing first trading day for cannabis stocks but this in and on itself does not mean anything. We must watch long term trends before coming to a conclusion on the solidity of our cannabis Canada stocks forecast for 2019.
To this end we look in the bellwether stock in the cannabis sector. That is, in our humble opinion, Canopy Growth (WEED.TO). It crashed in October but we said its long term uptrend was intact. Just one week ago we said it was decision time in this sector: cannabis sector go vs. no-go in 2019. We identified the $35 level as the line in the sand.
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’.
Any breakdown from this channel, if it would occur, would invalidate our thesis.
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.
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