Investors looking for top growth stocks to buy in this market may be looking far, far away from the Canadian cannabis sector. Indeed, following the incredible rallies in top names in this space in the 2017–2019 period, most of the country’s top marijuana producers have faced a series of ugly charts.
Since then, various catalysts have re-ignited certain rallies. However, for the most part, this is a sector that feels pretty much left for dead right now.
With that said, here are two pot stocks I think could actually buck the trend and be solid long-term picks. Let’s dive in.
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Curaleaf
Curaleaf (TSX: CURA) is among the top Canada-listed stocks I’ve got my eye on right now. As one of the largest multi-state operators in the U.S. market, Curaleaf is the preferred way a number of top investors are looking at gaining exposure to this key growth market.
While the Canadian cannabis industry continues to flounder, operations in certain key states in the U.S. have continued to show decent profitability and revenue growth. And while most Canadian flower and oil producers have seen profits fall off a cliff (in part due to how these companies report revenue and earnings), Curaleaf is expected to turn profitable within the next couple years.
That’s a far cry from what many investors are used to in this sector. So, with an inkling of profitability ahead and a growing network of retail stores in key growth markets, Curaleaf is among the best integrated plays in this space for those thinking long term.
For investors who think the cannabis sector can not only recover to previous growth rates, but eventually become a mature and profitable sector, Curaleaf looks like the best way to play this trade right now. That goes double for investors who expect legalization trends to continue in the U.S. market as well.
Cronos Group
Cronos Group (TSX: CRON) is probably my top Canadian cannabis stock pick focused on the domestic market.
Shares of CRON stock have plummeted more than 65% over the course of the past five years. However, over the course of the past year, Cronos investors have seen a nice rebound of more than 20% as investors pile into companies that are profitable in this sector.
With an EPS of $0.15 over the course of the past year, Cronos is indeed bucking the trend in part due to the company’s more integrated approach to the cannabis sector. With a goal of building world-class brands and diversity within its product portfolio, the company has been able to up-charge for premium products.
That’s a key differentiator from most other players who are staying put in the more commodity-like dried flower space. So long as Canadian consumers demand premium products from their suppliers, Cronos’ brand portfolio positions the company as one of the best options for those thinking long-term about this sector.
