Jim Cramer Thinks Cannabis Is Back in Action – Market Realist

The cannabis sector is getting hot again! Jim Cramer, the widely followed host of CNBC’s Mad Money, shared his views on the cannabis sector. He thinks that cannabis is hot right now. Cramer favored Canopy Growth (CGC) (WEED) and Cronos Group (CRON). As of 10:35 AM ET, Canopy Growth has fallen 5.7%, while Cronos Group has fallen 2.8%.

Jim Cramer Thinks Cannabis Is Back in Action

Jim Cramer Thinks Cannabis Is Back in Action

Why Jim Cramer likes Tilray

Tilray (TLRY) reported its second-quarter results on Tuesday. Jim Cramer said, “I don’t like Tilray because I don’t like the ownership structure. But cannabis is getting hot again and you might want to buy calls on Tilray.” The stock has suffered this year. So far, Tilray stock has fallen 39.8% YTD (year-to-date). The stock has fallen 10.5% today.

Jim Cramer favors Canopy Growth 

Earlier last week, Jim Cramer recommended Canopy Growth. Read Why Jim Cramer Favors CRON and CGC to learn more. He thinks that Canopy Growth has the capacity to turn around despite some hurdles. The fourth quarter wasn’t profitable for the company. Canopy Growth felt some pressure in July after its co-CEO and board member, Bruce Linton, stepped down. As a whole, the cannabis industry faced pressure in July due to regulation scandals.

However, Canopy Growth has a strong threshold due to its product formats and markets. The company plans to start US hemp operations. Canopy Growth also plans to use its large cash balance of ~4.5 billion Canadian dollars for acquisitions and growth.

The company is scheduled to report its results for the first quarter of 2020 after the market closes today. Investors should watch the company’s performance to see if it drives the stock price performance. Read Canopy Growth: What to Expect from Its Earnings Today to learn more.

Should investors consider Cronos Group?

Cronos Group showed tremendous potential in its recent earnings. The company reported strong second-quarter earnings results on August 8. Cronos Group’s revenues rose 201.6% YoY. Legalizing recreational cannabis supported the company’s revenue growth. Cronos Group also announced the acquisition of Redwood Holding Group.

Previously, Jim Cramer shared his opinion. He said that Canopy Growth and Cronos Group are good options since they want to expand their hemp business. Cramer thinks that the hemp business could be the biggest revenue driver for cannabis companies.

Other cannabis stocks

Cannabis stocks saw some light on Tuesday. To learn more, read IIPR, CRON, TLRY Surging: A Good Day for Cannabis Stocks.

Innovative Industrial Properties (IIPR), Tilray, and Cronos Group drove the whole sector. Innovative Industrial Properties is still a favorite, especially after its strong second-quarter results. To learn more, read IIPR’s Q2 Earnings Call: Key Takeaways for Investors and Why IIPR’s Q2 Earnings Came in Strong. Innovative Industrial Properties rose 7.8% on Tuesday.

Tilray rose on Tuesday before its earnings. However, the company reported dismal results. Tilray’s net losses were wider than analysts’ expectations. Although the company reported higher revenues, the stock fell 2.1%. Read Tilray’s Q2 Earnings Are Out: Did It Impress? and Tilray Stock Fell More than 10% after Its Q2 Earnings to learn more.

Other cannabis players also rose on Tuesday and closed with huge gains. Cresco Labs rose 17.0%. The company has been in the spotlight due to its recent New York marijuana license deal. To learn more, read Cresco Labs Lands New York Deal before Earnings. Cronos Group has gained 21.5%. Canopy Growth has returned 27.2% YTD.

Read Cannabis Industry: What’s the Next Phase? to learn more about the cannabis sector.

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