The marijuana industry has been making noise for years, but it really made a name for itself in 2018.
Even though pot stocks were mostly a buzzkill last year, the industry gained validity like never before in North America. We saw Canada end nine decades of recreational marijuana prohibition by becoming the first industrialized country in the world to green-light adult-use pot. This should, in all likelihood, have billions of dollars in added annual income flowing into the legal weed industry.
We also saw impressive advancements in the U.S. with the FDA’s first approval of a cannabis-derived drug, and with President Trump’s December signing of the Farm Bill, which legalized hemp and hemp-based cannabidiol (CBD) oil.
Four marijuana stocks that could deliver the green in 2019
But with a new year comes a new way to analyze marijuana stocks, now that the legalization movement has really picked up. No longer are promises enough to push pot stocks higher. Rather, Wall Street and investors are looking for tangible evidence of this industry’s potential, which means strong sales growth and, most importantly, profits.
Of course, profitability isn’t as cut-and-dried as you might think with marijuana stocks. That’s because fair-value adjustments on biological assets tied to International Financial Reporting Standards (IFRS) can cause wild vacillations in a company’s bottom line. If we’re talking about legitimate profitability (i.e., a higher gross profit, sans any adjustments, than operating expenses), there are four pot stocks that could deliver the green in 2019…