This Marijuana Stock is Headed Much Higher From Here

I love it when institutional money managers start snooping around the stocks I’ve already identified as big winners down the road.

That extra buying power can provide a huge catalyst to the names I already love.

What stocks have been beaten up the most of late?

Cannabis stocks.

With all the selling cannabis stocks have seen, value managers are swooping in looking for a bargain. I say have at it.

And one of the best marijuana stocks to invest in is trading at absolute bargain levels right now.

It really makes no sense, especially considering we are in the early stages of marijuana legalization in the United States.

Owning cannabis stocks is all about the future – a future that is bright indeed.

So when analyzing my favorite cannabis stock, the latest round of selling is truly a head-scratcher.

After reporting its most recent operating results, shares of Canopy Growth Corp. (NYSE: CGC) tanked… again.

That puts losses since peaking earlier this year at more than 50%.

Why anyone would examine an earnings report today for determining the valuation of a cannabis stock is beyond my pay grade.

I just know whatever transpired in the previous quarter does little to change my long-term outlook for Canopy Growth.

The stock is a winner, period.

With a big stake coming from beverage company Constellation Brands Inc. (NYSE: STZ), I am not alone in that opinion.

Certainly, quarterly earnings may matter to a stock like Constellation, but not Canopy.

These are early days, and the company is doing all the right things to position itself for huge growth.

And when you look at the earnings tumble, the mistake Canopy made in the last quarter is easily fixed.

Recreational use in Canada was lower than expected.

The company made a strategic error building an inventory of oils and soft gels thinking that recreational demand for such products would be similar to what the medical marijuana use crowd was demanding.

Apparently, Canopy got this wrong. But again, this problem is easily fixed.

It will adjust its manufacturing to match demand, just like any other seasoned company would do.

And when Canopy gets it right, no more disappointment.

The market today is way too sensitive to quarterly operating mistakes and not nearly focused enough on the long term.

That’s why value investors are sniffing around pot stocks looking for a bargain.

They have one in Canopy. You see, this is a marijuana stock that is headed much higher from here…

The Best Marijuana Stocks to Invest In Are Excellent Long-Term Buys Right Now

Recreational pot sales in Canada are relatively new, just like the Internet was back in the 1990s.

Think about a company like Inc. (NASDAQ: AMZN) and the huge number of mistakes that company made on a quarter-to-quarter basis.

Did any of that matter in the long run?

Absolutely not. Amazon is one of the leading technology companies in the world today, having completely transformed the way the world does business.

Canopy Growth is in a similar position to Amazon back in the dot-com craze.

Canopy is a first mover, and as a first mover, it is gaining market share and increasing its war chest to dominate the market.

The company has a head start on the competition in the United States, where legalization is spreading.

And Canopy is positioned to do the same across the globe.

Estimates for future revenue are likely to be way off base in the near term, especially with the market so focused on quarter-to-quarter results.

For those frustrated by the selling in Canopy shares over the last several months, I feel your pain. But now is not the time to jump ship.

Not when so many initiatives and catalysts are on the near-term horizon.

The play today is to actually buy more shares at these discounted prices.

Another major catalyst: pain management.

How else do you explain the opioid epidemic and the billions in claims now being pursued by those aggrieved?

Marijuana is a far safer alternative to powerful pharmaceuticals and will likely be just as profitable – and without the future liability.

Indeed, the future of cannabis is very bright.

One poor performance on a quarterly basis does not change that future.

Buy Canopy Growth now, and hold on for what may be the ride of your life.

Illinois Becomes the 11th State to Legalize Cannabis (Making More People Rich)

Cannabis laws are being reformed en masse: Illinois has not only become the 11th – and second largest – state to legalize marijuana, but the first to do so by way of state legislation.

That means the medical, personal, and economic benefits of “America’s Green Gold Rush” are appealing to Republicans and Democrats alike.

One cannabis research executive is hailing Illinois the “Marijuana Mecca of the Midwest,” a hallmark of the rising uncapped profit potential ahead.

Once the Fed ends the cannabis prohibition nationwide, all bets will be off – demand will boost share prices through the roof. But you can still get in on the ground floor, just in time for what could be the windfall of the century.

Illinois is already housing some of our top picks in the industry, so a few of our favorite stocks could get yet another boost.

— Jamie Dlugosch

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Source: Money Morning