3 Marijuana Stocks to Buy, Sell, and Hold

If you have confidence in the cannabis sector and serious about investing, buy The Supreme Cannabis Company Inc. (TSXV:FIRE), hold Canopy Growth Corp. (TSX:WEED)(NYSE:CGC) and sell Aphria Inc. (TSX:APHA)(NYSE:APHA).

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Excitement and disappointment are what cannabis investors experience in the sector. There is the initial excitement to be followed by disappointment. When the approval of the Cannabis Act was nearing, most weed stocks were rising. After the enactment of the law in October, things got ugly.

News bits move weed stocks prices, not sound fundamentals. It’s amusing that investors are easily swayed by press releases. But when you deeply analyze the industry situation, the so-called marijuana boom will happen sometime in 2020.

Hence, now is the best time to get serious if you believe in the cannabis industry’s bright prospects. I have decided to share my choices on which marijuana stocks to buy, hold, and sell. I’m following my instincts and foresee rewards if I’m correct.

The Supreme Cannabis Company Inc. (TSX:FIRE)

BUY!

Seldom-heard Supreme Cannabis is a bit player in the cannabis space. The current price is only $1.79 at writing, but analysts see the stock catching fire in the months ahead. The upside potential of 151% looms large. Should it fall, the financial damage wouldn’t be grave.

The $526 million company is engaged in the production of medical cannabis. Their wholesale partners are some of the leading cannabis producers and processors in Canada. Several supply agreements with top licensed cultivators are also in place to deliver the dried cannabis flower.

With the recent acquisition of a premium wellness-focused cannabis company, FIRE is worth watching. I wouldn’t be surprised to see my small investment turn into a fortune.

Canopy Growth Corp. (TSXV:WEED)(NYSE:CGC)

HOLD!

My choice of Canopy Growth is unbending. A weed company that’s partnered with Constellation Brands (NYSE:STZ) is destined for market dominance. Assuming you bought WEED on the last day of December 2018 at $36.61 and held on, your investment would have grown by 64.3%.

The time will come that WEED will consistently reward investors with market-beating returns. Analysts have high expectations too. They have set a price target of $100 in the next 12 months. Though it seems far-fetched, a lot of things will likely propel the stock price higher.

The shareholders of Canopy Growth and multi-state operator Acreage Holdings Inc. will vote on the Canadian producer’s plan to acquire the U.S. firm on June 19. An overwhelming vote in favour of the deal will result in the first-ever tie-up of American and Canadian cannabis players.

However, the deal will push through only when cannabis becomes federally permissible across the border. There is also the construction of a hemp production facility in the Big Apple. Canopy Growth is obviously determined to corner the U.S. market.

Aphria Inc. (TSX:APHA)(NYSE:APHA)

SELL!

I need not expound my sell position on Aphria. The series of unfortunate events is enough to exclude this weed stock from my buy-and-hold weed stock choices. However, the company is the third-largest cannabis producer with a strong international presence. Aphria can still prove me wrong in the end. I sincerely hope it does.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned.

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