These 2 marijuana stocks have been sparking a lot of headlines recently, and both look like great buys now.
After a wild 2018, pot stocks had a red-hot start to 2019. But over the past couple of months, marijuana stocks have cooled off a bit as weaker-than-expected earnings from some of the biggest names in the industry took a toll on the group.
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But even as the industry’s sky-high valuations have begun to fall, there are a couple of pot stocks worth keeping an eye on that have sparked headlines recently.
The first is MedMen Enterprises (OTC: MMNFF). MedMen made headlines this week after it announced it had received an additional $30 million equity investment from Gotham Green Partners with participation from Wicklow Capital.
The California-based company said this new investment brings its total financing commitment to $280 million.
“Both Gotham Green and Wicklow have shown continued confidence in our strategy and recognize the potential ahead,” said Adam Bierman, MedMen’s co-founder and CEO.
MedMen currently has licenses for up to 86 retail stores across the U.S.—37 of which are operational—and this new financing will help the company focus in on strategic markets such as Illinois, where the company anticipates having 10 stores after the state moves from a medical marijuana market to a recreational-use state in 2020.
The investment will also help the company gain ground in Florida, where the company plans to open an additional 11 stores this year.
“MedMen’s strategy, brand and performance makes them the clear leader of cannabis retail in the U.S. and we are supportive of management’s vision and plan for growth and profitability,” John Adler, managing member of Gotham Green Partners, said in a statement. “As their primary capital partner, we will continue to support the Company as they bring their iconic brand to new markets.”
Analysts are bullish on the stock, and rate it a Buy. Their average price target for MedMen is $8, suggesting possible upside of 236% over the next twelve months.
The other pot stock that’s made headlines over the last couple of weeks is industry-leader Canopy Growth (NYSE: CGC).
Last week, news broke that co-CEO Bruce Linton had been “terminated” from the Canadian pot company he founded six years ago.
On the news, shares of the industry heavyweight slumped as much as -8% last Wednesday and are down nearly -14% for the month. However, Canopy Growth is up 38% so far this year, and the company is in the best position to win in the marijuana space with a new leader at the helm.
That’s according to Constellation Brands (NYSE: STZ) CEO Bill Newlands, who said that the “board was uniform. We were unanimous that we needed a different leader to take us to the next phase of growth.”
Constellation Brands owns a 38% stake of Canopy Growth after an investment of $4 billion into the company. And Newlands believes the company is in a position to dominate what could amount to a $200 billion market.
While Linton’s departure was shocking to many, a fresh set of eyes could help take Canopy Growth to the next level.
The company is likely to attract top CEO talent considering its leadership in the industry. And if the company can land a CEO with a proven track record of global success, then the stock could be in for a long-term rally making now a great time to buy after the sell-off seen the last two weeks.
Nine analysts rate CGC a Buy, and their average price target for the stock is $59.80 – 61% higher than Thursday’s closing price.