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It is easy to forget, during turbulence in the markets, that over the long term, equities have helped long-term investors create wealth that will change their lives. Even with the simple use of index funds, disciplined investors who regularly invest in the stock market have seen their savings soar. Those who have identified promising niches in the market have done much better.
Marijuana stocks have attracted a lot of attention lately due to the trend towards greater acceptance and legalization of cannabis products. This peaked when Canada legalized marijuana for recreational purposes earlier this month, but even after a positive downturn in cannabis stocks, long-time investors in this sector posted impressive gains. If you had invested $ 10,000 equally in marijuana shares Cover growth (NYSE: CGC), Cronos Group (NASDAQ: CRON), and Aurora Cannabis (NYSE: ACB) on various Canadian stock exchanges three years ago, you would have a portfolio of more than $ 200,000 today. The big question now is whether these three key cannabis leaders can maintain positive momentum.
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The best known pot stock
Canopy Growth has the highest reputation among marijuana investors, largely because it attracts the most attention from the traditional business world outside of the cannabis industry. Canopy has attracted two separate investments from the beer giant Constellation Brands (NYSE: STZ), including an investment of nearly $ 4 billion a few months ago. The deal has raised awareness across the industry and other marijuana growers have sought out their own partnership to give them the cachet of Canopy Growth.
Canopy has become a leader in the sector because of its immense production capacity, which places it firmly at the top of the current business. However, Canopy is not content to rest on its laurels and is striving to increase its production. At the same time, the cannabis company's early success in creating its Tweed brand of cannabis-based products demonstrates its business acumen. Even though its stock has jumped nearly 1,800% in the last three years, Canopy Growth has more room to maneuver.
Source of image: Canopy growth.
Leader of the pack
The Cronos group has the distinction of being the most successful marijuana stock of all time at the present time. Despite the decline observed in recent weeks, Cronos has recorded gains of more than 2,700% in recent years. Formerly known as PharmaCan Capital, Cronos has been a major player in the medical marijuana segment of the cannabis industry.
Like Canopy, Cronos has worked hard to increase its production capacity. Another growth path is international distribution, with partnerships allowing it to access the Australian, Israeli, German, Polish and various Latin American markets. With a new collaboration with Ginkgo Bioworks To develop high purity cannabis derivatives, Cronos hopes to exploit the growing markets for medical and recreational use. If that succeeds, it could lead to even bigger gains for Cronos.
Aurora hits the NYSE
Finally, Aurora Cannabis is best known for its recent listing on the New York Stock Exchange. Yet even before that, the stock had managed to generate gains of 1,400% on trade in Canada.
Aurora focused on building production capacity as quickly as possible, trying to track and surpass Canopy Growth with projects including its Aurora Sun installation near Edmonton International Airport and facilities. similar growth in eastern Alberta and Denmark. With investments in other players in the cannabis industry, Aurora is also trying to stay diverse and build key collaborations that can be used to grow more effectively. This will be essential as it strives to maintain its competitive position in the rapidly evolving marijuana market.
Any other earnings to come?
Marijuana shares have generated incredible gains and, now that they are clearly the focus of large investor investment, it will be difficult to see a 20-fold increase from current levels. Nevertheless, for those who see the potential benefits of cannabis, Aurora Cannabis, Cronos Group and Canopy Growth all deserve future attention to see how they can build on their initial success.
Dan Caplinger has no position in the mentioned actions. The Motley Fool recommends Constellation Brands. Motley Fool has a disclosure policy.
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