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The 3 Best Pot Stocks to Buy to Profit from the Cannabis Oil Boom
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Stocks: ACBFF, APHQF, NEPT, RDDTF, TWMJF

The 3 Best Pot Stocks to Buy to Profit from the Cannabis Oil Boom

By David Zeiler, Associate Editor, Money Morning • @DavidGZeiler • February 2, 2018

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Finding the best pot stocks to buy has become harder, as anticipation of further legalization has sent the shares of many marijuana companies soaring.

Special Report: Here's What One of California's Savviest Weed Insiders Told Me

Marijuana Stocks

The Horizons Marijuana Life Sciences Index ETF (exchange-traded fund) rose 74% from its debut in April through the end of 2017.

And several individual pot stocks did far better last year. Aphria Inc. (OTCMKTS: APHQF) was up 292%, while Aurora Cannabis Inc. (OTCMKTS: ACBFF), for instance, rocketed 344%.

It's getting harder to find winners in this segment - but not impossible.

But one sector of the market in particular still offers tremendous upside for investors. Right now, the companies focused on the cannabis oil segment will be the best marijuana stocks to buy in 2018.

Here's why...

Why Cannabis Oil Pot Stocks Are in a Sweet Spot

Traditionally, people primarily consumed marijuana by smoking the plant, known as "flowers."

But the trend toward legalization in the United States and Canada has opened the door to new options that offer more convenient, less conspicuous ways to consume cannabis.

Concentrates and oils are easier to transport and easier to consume than smoking the flower form of marijuana. Plus, the oils lack the telltale odor for those who'd rather not broadcast their cannabis use to the world.

Customers have taken to cannabis oils in particular. Oils can be ingested orally with a dropper or made into a capsule; they can also be vaped.

That flexibility, in addition to its other advantages, has fed the popularity of cannabis oils. Sales of marijuana vaporizer cartridges in California soared 400% from 2015 to 2016, rocketing from just 6% of the market to 24%.

Pot Stocks

That makes cannabis oils a fast-growing segment of a rapidly growing market, fed by the trend toward legalization. Canada is expected to fully legalize marijuana this summer, while 29 U.S. states and the District of Columbia already have legalized some form of medical marijuana.

ArcView Market Research estimates marijuana sales in North America alone will explode from $7.3 billion in 2016 to $24.5 billion by 2021. That's industry growth of 235%...

And as if that wasn't enough, cannabis oils have healthier profit margins than other forms of marijuana.

With that in mind, here are the three best pot stocks to buy to capitalize on this lucrative trend...

Cashing In on Cannabis Oil: The 3 Best Pot Stocks to Buy

Canopy Growth Corp. (OTCMKTS:Ā TWMJF)

Canopy is the biggest cannabis grower in Canada and has been expanding its capacity. It's poised to be one of the major global players in the industry as marijuana legalization spreads to more countries.

In addition to exposure to the blossoming Canadian market, Canopy already has agreements to export products to Germany, Australia, Spain, Denmark, Jamaica, Chile, and Brazil. The company is avoiding the United States for now, because marijuana is still illegal at the federal level. But if and when that changes, Canopy will be ideally positioned to jump on the opportunity.

Must-See Interview: Marijuana stock expert Michael Robinson shares details on three tiny pot stocks set to explode following California’s Jan. 1 marijuana legislation. Watch here now…

Canopy already has a foot in the door thanks to a $191 million investment from alcoholic beverage maker Constellation Brands Inc. (NYSE:Ā STZ)Ā last October. It's no coincidence that Constellation, which has a strong presence in California, made its move just months ahead of the state's full legalization of marijuana.

Over the past year, Canopy has put more emphasis on its cannabis oils products, citing the higher profit margins of oils in its September quarter earnings report. Sales from oils increased 107% year over year, and the segment's contribution to overall revenue rose from 14% to 18%.

The Brightfield Group estimates the global marijuana market will reach $31.4 billion by 2021. Should Canopy get 5% of the global cannabis market, it will grow sales by 250%. Even after considering one-year gains of 228%, that kind of a massive increase in revenue should boost the stock price substantially from the current $25.35.

Radient Technologies Inc. (OTCMKTS:Ā RDDTF)

It would be easy to overlook Radient; it's small (the market cap is just under $300 million), and it's not wholly focused on cannabis. But it has a superior cannabis oil extraction technology that's already caught the attention of the No. 2 Canadian producer.

The technology, which uses microwaves to extract oils from plant matter, is why Aurora Cannabis has made two major investments in Radient over the past year. In December 2016, Aurora invested $2 million in Radient as part of a joint venture to further adapt Radient's technology for cannabis oil extraction. Until that point, it was used to extract oils for the food, pharmaceutical, and cosmetic industries. Aurora followed up with an additional $12 million investment this past December.

The appeal is that Radient's patented MAP (microwave-assisted processing) technology is significantly more efficient at extracting cannabis oil from hemp and marijuana. The company estimates MAP can reduce the cost of goods sold by 30% and boost gross margins by as much as 65%. Those gains hold true regardless of the type of biomass on which the technology is used.

Never Miss a Marijuana Profit Opportunity

Any cannabis oil producer with access to Radient's MAP technology stands to be much more profitable. The agreement specifies that Radient will "deliver services under preferential terms to Aurora" for the five-year term of the deal.

The additional business from an industry leader like Aurora will have a dramatic impact on Radient's revenue, which should drive Radient's profits and stock price higher. Radient stock currently trades at $1.27, so even a relatively small move could have a big payoff.

And don't be surprised if Radient becomes an acquisition target, which could push the stock much higher. Radient's MAP technology is exceptionally attractive, and the company's relatively small valuation makes it affordable. Aurora already has established a reputation as an acquisitive company; that and its preexisting relationship with Radient makes it the most likely buyer.

While those two pot stocks are very good bets, we've saved the best for last...

This Pot Stock Could Soar 330%

Join the conversation. Click here to jump to comments…

David ZeilerDavid Zeiler

About the Author

Browse David's articles | View David's research services

David Zeiler, Associate Editor forĀ Money MorningĀ at Money Map Press,Ā has been a journalist for more than 35 years, including 18 spent atĀ The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving atĀ Money MorningĀ in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple forĀ The SunĀ in the mid-1990s, and had an Apple blog onĀ The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

… Read full bio

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George
George
4 years ago

After following advice on buying pot stocks, my stocks were up the beginning of January. They have since turned the other way around and now I'm looking at double digit losers!

0
Reply
Lee
Lee
4 years ago
Reply to  George

We need a list of the weakest pot stocks so we can shift into the most likely winners.

0
Reply
supharaj chokwonganun
supharaj chokwonganun
4 years ago

st of the Cannibas company price are coming down sharply
advise the reason? are investore are going out?
s

0
Reply
gerald
gerald
4 years ago

when did acbff rock 344% I am starting to wonder what you are telling me

0
Reply
Paul Epling
Paul Epling
4 years ago
Reply to  gerald

we put a lot of money in marjunia stocks and are taking a beating what should we do?

0
Reply
Steven
Steven
4 years ago
Reply to  gerald

From 4/17-early 1/18 my aurora shares were up over 400%. They dropped to being up about 250% and I sold.

0
Reply
RAJ MAL PARAKH
RAJ MAL PARAKH
4 years ago

Through which brokers we can buy these penny stocks at OTC. Please provide four names of such brokers.

0
Reply
bruce McLeod
bruce McLeod
4 years ago

how do I invest in Canadian MJ stocks without a broker.Are there any Canadian co.'s that sell direct? Thanks Bruce.

0
Reply
Robert Pacione
Robert Pacione
4 years ago

Well guys! I don't think it's fair to blame anyone hear as you are given choice through your decision on where your greed lies. No offence. I sold out last Friday. Warnings that the industry was over priced were everywhere. I lost a few bucks but nothing to worry about. I'm down in two years everything I've tried to invest to better my life but it's all backfired. I'm use to it but I won't believe I can't get it all back.one day. I'm just being patient and not panicking.

Regardless! We can't stop the powers that be to manipulate the markets to there advantage. The timing is funny though with the jobs created and the Feds targeting interests rates. Hmmm. Planned manipulation fully controlled to steal back from those seeds caught in the headlights…

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Reply
Stash
Stash
4 years ago

The Marijuana stocks are dropping faster than a loose bowel movement after Ex-lax. So much for becoming a "Marijuana Millionaire!"

0
Reply
Donald Nicholls
Donald Nicholls
4 years ago

Money

0
Reply
Adam
Adam
4 years ago

I think we hold on…

0
Reply
Gen Sullivan
Gen Sullivan
4 years ago

great article about the pot stocks!!

0
Reply
Jim Gibson
Jim Gibson
4 years ago

I want to also make profits from cannabis! Thank you so much for sharing this good news! Whoa! I'm looking for the best stock market for marijuana!

0
Reply
Jennifer Smith
Jennifer Smith
4 years ago

Great info!

0
Reply
Michael Fitton
Michael Fitton
4 years ago

Tip..
Consolidation will start more rapidly in 2019.
Avoid extremely speculative OTC stocks and invest in large companies with a big market cap.
i.e – NASDAQ stocks like
Example TLRY
52 week high $300.00 / share
52 week low. $ 20.10 / share
Last 6 mo (today 1/7/19)
Reread line 1 – my first sentence
M & A’s
ā€œMergers & Acquisitionsā€
Pls advise
Thx
MF

0
Reply
Kevin Murphy
Kevin Murphy
3 years ago

Thank you for sharing these tips i really appreciate this one you have shared. I've been enjoying reading this article and I've learned a lot it just like giving you information and i really love it so far.

0
Reply
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