Some marijuana stocks are hot. And some are not.
HEXO (NYSEMKT:HEXO) undoubtedly falls into the former category. Its shares have a lot more than doubled so far this year. MariMed (NASDAQOTH:MRMD), on the other hand, is not so hot in 2019. Even though the stock soared 371% in 2018, MariMed is down three% year to date.
But which of these two marijuana stocks is the much better lengthy-term choose for investors? Here’s what you will need to know about HEXO and MariMed.
The case for HEXO
HEXO is a prime player in the Canadian adult-use recreational marijuana industry. The company scored a big provide agreement final year with the province of Quebec. It now commands a industry share of 30% in the recreational marijuana industry of Canada’s second-most-populated province.
In its final quarter, HEXO reported year-more than-year income development of 1,269%. Its sales vaulted 144% from the earlier quarter. The essential to this good results, of course, was the launch of the Canadian recreational marijuana industry.
Even much better days could lie ahead. Canada is anticipated to open the gate for sales of cannabis beverages and edibles later this year. HEXO must be in terrific shape to win in this industry. The organization formed a joint venture with huge beer maker Molson Coors Brewing in 2018 to create cannabis-infused beverages.
HEXO also seems to be in a strong position on production capacity. It really is on pace to make about 150,000 kilograms of cannabis per year, thanks in aspect to the acquisition of Newstrike Brands. This is sufficient to rank HEXO at No. six amongst Canadian marijuana producers primarily based on production capacity.
Though HEXO hasn’t been a huge player in international markets, the organization hasn’t overlooked the chance. In September 2018, HEXO partnered with Greek health-related cannabis operator Qannabos to make and distribute health-related cannabis in Europe.
One particular prime Wall Street analyst thinks that HEXO is the very best marijuana stock on the industry suitable now. Bank of America’s Christopher Carey specifically likes HEXO’s industry position in Quebec and its fairly low valuation, at least compared with its peers.
The case for MariMed
MariMed began out as an advisor to smaller cannabis operators. Even so, the organization started obtaining its clientele final year. MariMed now is one particular of the biggest multi-state cannabis operators in the U.S.
Its small business is absolutely booming. In the fourth quarter, MariMed’s income soared 118% year more than year to $three.four million. That sturdy development must continue nicely into the future.
For one particular point, MariMed is not completed gobbling up its clientele. The organization expects to total the consolidation of ownership of its clients’ cannabis corporations by 2020. This approach must maintain MariMed’s prime line expanding steadily.
MariMed must also advantage as a lot more states legalize health-related and/or recreational marijuana. The organization is poised to be one particular of the winners in Illinois as the huge state moves toward legalizing recreational pot. MariMed has a cannabis production facility in Illinois and markets well-liked cannabis edibles brand Betty’s Eddies.
The organization has also jumped into the U.S. hemp industry. MariMed invested $30 million in hemp genetics organization Gencanna. It formed a new division to concentrate on creating hemp-primarily based cannabidiol goods.
In addition to these development possibilities, MariMed has other irons in the fire that could spend off. The organization invested in Sprout, which markets a buyer connection management and advertising and marketing platform made for the cannabis sector. It also invested in Iconic Ventures and secured exclusive distribution rights in numerous states for Icon’s new DabTabs cannabis vaping item.
Greater marijuana stock
I believe HEXO gets the nod more than MariMed. The launch of the cannabis beverages and edibles industry in late 2019 must supply a good increase for HEXO.
Even so, international health-related cannabis markets will be a lot more significant than the Canadian marijuana industry more than the lengthy run. I am concerned that HEXO’s international presence does not match up to numerous of its peers. Though my view is that HEXO is the much better choose for now more than MariMed, I believe there are even much better marijuana stocks that must produce larger returns in the future.