February is going to be a big month for the marijuana industry. With Canopy Growth Corp (TSX:WEED)(NYSE:CGC) expected to release earnings on February 14 and Aurora Cannabis Inc set to do the same on February 11, there’s a lot of news to keep up with. But there’s more than just earnings to look out for. Between Aphria Inc’s (TSX:APHA)(NYSE:APHA) hostile takeover drama and a new round of acquisition mania, there’s enough going on in this industry to keep investors’ hands full for 28 days. The following are just three marijuana stocks worth watching in the busy weeks ahead.
Canopy Growth Corp (TSX:WEED)(NYSE:CGC)
Despite having recently been eclipsed by Aurora on revenue, Canopy is still the #1 marijuana stock by market cap. Its most recent earnings report was widely regarded as a disappointment, with 33% revenue growth and a $330 million loss. On February 14, Canopy is expected to release earnings that cover the period ended December 31. These will show whether revenues from legal cannabis were enough to counteract this company’s slowing growth and mounting losses.
CannTrust Holdings (TSX:TRST)
CannTrust Holdings is another pot stock worth watching in February. CannTrust stood out in 2018 for its steady operating profits when few marijuana companies were able to achieve the same. Whereas other cannabis companies pursued growth at great cost, CannTrust kept things lean and mean. The big question is which strategy will win out in the end. We may get a hint on that front this month, as the company should be releasing an earnings report for the quarter ended December 31 in the next few weeks (based on the date of its previous report).
Last but not least, we have Aphria. Aphria is currently the target of a hostile takeover bid by Green Growth Brands, which is offering less than Aphria’s average 30-day share price. Because management has rejected the bid, Green Growth is going direct to Aphria shareholders. The bid is a long shot because of its low offer of 1.5 Green Growth shares per Aphria share, which would represent a loss for any Aphria shareholder who bought in January. However, many long-term Aphria shareholders purchased at lower prices, so they may be persuaded to sell.
Between legalization, volatile stock prices, and Canopy’s $5 billion deal, the pot industry’s 2018 will be a hard act to follow. But so far, 2019 is holding its own rather well. We’ve already witnessed a rally that has taken Canopy shares north of $65 — approaching their 2018 highs. And with earnings on the horizon, who knows what’s next. The big question is whether cannabis producers will become cash flow positive after running up enormous expenses last year. If the news is good, we may witness a new rally in cannabis stocks that eclipses even what we saw last summer.
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This is the company we think you should strongly consider having in your portfolio if you want to position yourself wisely for the coming marijuana boom.
Fool contributor Andrew Button has no position in any of the stocks mentioned.