CBD was one of the biggest breakout sectors this year, and as it continues to grow, we're going to show you what might be the best CBD stock to buy in 2020.
No doubt, most investors have heard by now about the healing properties of cannabidiol, or CBD. That's the non-psychoactive compound in the cannabis plant that can help with pain relief, calming, and overall better health. Many have already invested in cannabis stocks, poised to ride the wave.
But the excitement surrounding cannabis may have gotten ahead of itself. Legal weed stocks soared in the first half of 2019 but came back down to earth in the second half.
The industry is still working out the kinks. Supply and distribution chains were not ready, and neither were regulations and other back-office functions. That's to be expected in such a new industry.
But now, with more and more states and countries making it legal, CBD is getting back on track.
Early in 2019, Money Morning Director of Cannabis Investing Research Greg Miller called this "the year of CBD." He was right in spades, too. There are lotions, potions, beverages, and medicines out there, all enhanced with CBD. It is becoming quite common to see them in your favorite local stores.
But the future looks even better for CBD. Research is now underway on how CBD could help autism, post-traumatic stress, and even the career-ending chronic traumatic encephalopathy (CTE) suffered by professional athletes in the NFL.
It has been hailed as part of the solution to opioid addiction, thanks to its pain-controlling abilities. That alone should make it of utmost importance with politicians and those who are responsible for funding and regulating it.
Greg still thinks cannabis is a monster growth story. Back in January, he wrote that the market was already worth $55 billion and could be worth $146.4 billion by 2025.
Many cannabis stocks are firming themselves up for the next phase in their growth. Their stock prices, now well down from earlier highs, offer tremendous value going forward.
And here's what could make this one of the best 2020 CBD stocks...
Why This Top CBD Stock Could Soar in 2020
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Medicine Man Technologies Inc. (OTCMKTS: MDCL) provides cannabis consulting services, nutrients, and supplies. It operates in 20 states and seven countries, on track to become one of the largest vertically integrated, seed-to-sale operators in the global cannabis industry.
In a nutshell, the company is a full-service cannabis consulting and turn-key solution provider, including cannabis cultivation solutions. It tells potential customers that it "provide[s] the experience and expertise to clients who have the resources necessary to enter the competitive medical and recreational cannabis marketplace."
In September, the company announced it would acquire Roots RX, a top dispensary brand in Colorado. Roots offers high-quality cannabis, business systems, and a unique loyalty program.
Roots also operates a large outdoor cultivation facility in Aspen, recognized for its high-quality offerings.
Also in September, the company acquired Canyon LLC, a maker of cannabis edibles. At the same time, it also announced a deal to acquire Strawberry Fields, another Colorado-based cannabis operator.
Medicine Man shored up the management team with the appointment of Nancy Bush Huber as the Company's Vice President of Finance. Huber has over 25 years of executive management roles as chief financial officer and VP of finance and will be front and center in establishing Medicine Man's financial and strategic planning, especially with future acquisitions.
Villamayor Capital believes the company is undervalued. Competitors are valued at nine to 47 times sales, while Medicine Man is at six times sales. Perhaps its small size is tamping down enthusiasm for the stock, but the bigger it grows, the more demand there will be for shares.
There is one more factor to consider. While many of the larger companies saw their stocks give up early 2019 gains, Medicine Man only gave back half of its early-year bull run. That suggests investors are hanging on, waiting for the next catalyst to send it higher again.
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